SHIRLEAN WARREN, Plaintiff and Appellant, v. KIA MOTORS AMERICA, INC., Defendant and Respondent.
E068348
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION TWO
Filed 12/12/18
CERTIFIED FOR PUBLICATION; (Super.Ct.No. CIVDS1414575)
OPINION
APPEAL from the Superior Court of San Bernardino County. John M. Pacheco, Judge. Reversed with directions.
Rosner, Barry & Babbitt, Hallen D. Rosner, Shay Dinata-Hanson, and Michelle A. Cook for Plaintiff and Appellant.
Bowman and Brooke, Brian Takahashi, Joyce Peim; SJL Law, Julian G. Senior, Stefanie G. Jo, and Marcelo Lee for Defendant and Respondent.
A jury awarded plaintiff and appellant, Shirlean Warren, $17,455.57 in damages pursuant to the Song-Beverly Consumer Warranty Act (
In this appeal, Warren challenges her attorney fee award and her costs and expenses award. In the trial court, Warren requested $526,582.89 in attorney fees ($351,055.26 in lodestar fees, times a multiplier of 1.5) and $40,151.11 in costs and expenses. The court applied a negative multiplier of 33 percent (33%) to the lodestar figure of $351,055.26, resulting in the $115,848.24 attorney fee award ($351,055.26 times .33 equals $115,848.24). The court disallowed two items listed in Warren‘s memorandum of costs: (1) $9,832.46 in prejudgment interest on the $17,455.57 judgment; and (2) $5,882 for court reporters’ trial transcripts. ($40,151.11, less $5,882, less $9,832.46, equals $24,436.65.)
Warren claims the court abused its discretion in applying a 33% negative multiplier to her requested lodestar attorney fees. Warren argues that, by applying the negative multiplier, the court erroneously limited her attorney fee award to a proportion of her $17,455.57 damages award, and thus used a prohibited means of determining reasonable attorney fees. She also claims she was entitled to recover prejudgment interest on her damages award and that the court erroneously struck the $5,882 expense for trial transcripts from her cost bill.
We conclude that Warren has not shown she was entitled to prejudgment interest on her jury award as a matter of right. (
We also conclude the court abused its discretion in applying the 33% negative multiplier to Warren‘s requested lodestar attorney fees of $351,055. Part of the court‘s expressed purpose in applying the negative multiplier was to tie the attorney fee award to a proportion of Warren‘s modest damages award. This was error. Thus, we reverse the attorney fee award and the
II. BACKGROUND
A. The Litigation Through the Jury Award2
In January 2011, Warren purchased a 2010 Kia Forte priced at $16,375, with express warranties. Warren‘s total purchase price for the vehicle was $24,737.45, including taxes, fees, and all finance charges on a five-year loan. Within the first year of its purchase and at 26,600 miles, Warren began having “problems” with the vehicle. Through May 8, 2013, Warren took the vehicle to a Kia-authorized repair facility a total of 14 times. On May 8, Warren traded in the vehicle and purchased a 2013 Kia Forte.
Sometime between May 8, 2013, and June 12, 2014, Warren learned that she could request a “buyback” of her 2010 Kia Forte pursuant to the Song-Beverly Act. On June 12, Warren called Kia‘s call center, requested a buyback, and was told that her request would be “escalated” or referred to the regional office for review. On June 17, the regional call center called Warren and left a voice mail, telling Warren the case had been “escalated” to their department, they wanted to discuss the case, and asking Warren to return their call. At trial, Warren denied receiving any voice mail or follow-up contact of any kind from the call center. In any event, Kia did not attempt to contact Warren after June 17 and closed the case on July 2, 2014.
Warren later contacted O‘Connor & Mikhov LLP (OM Law) concerning her potential lemon law claim. OM Law agreed to take the case and “bear the risk associated with litigating the case on a contingent-fee basis,” knowing it “faced a genuine risk of not being paid for its services for years, if at all, while advancing thousands of dollars in costs.” Before filing suit in October 2014, OM Law offered to settle the case, but Kia rejected the offer.
In October 2014, OM Law filed Warren‘s operative original complaint against Kia, alleging Kia violated the Song-Beverly Act by failing to adequately service and repair “defects and nonconformities” in the 2010 Kia Forte, including “suspension, electrical, interior, and brakes defects” and further alleging Kia failed to conform the vehicle to its express warranties despite a reasonable number of repair attempts. The complaint sought general, special, actual, incidental, and consequential damages according to
By May 2015, the parties had exchanged some written discovery, but Kia had not offered to settle the case and the case appeared likely to go to trial. Thus, on May 6, 2015, OM Law associated The Altman Law Group (Altman Law) into the case as cocounsel for Warren, with the understanding that Altman Law would serve as Warren‘s “lead” trial counsel and prepare the case for trial.
In October 2015, Kia offered to settle the case pursuant to what Warren claimed and the trial court ruled was an uncertain and therefore unenforceable
At a mandatory settlement conference in January 2016, the parties did not settle the case and it was ordered to trial. Despite Altman Law‘s May 2015 association as lead trial counsel, OM Law attended trial readiness conferences on January 11 and 12, and February 25, 2016. In June 2016, OM Law associated a third law firm, Wirtz Law APC (Wirtz Law) “to join the case as lead trial counsel and prepare the case for trial” “due to Altman Law‘s busy trial calendar involving other cases against Kia that caused scheduling conflicts with Kia.” An attorney from Wirtz Law attended trial readiness conferences on June 16, 20, and 23, and July 14, 18, and 21, 2016. Attorneys for Kia appeared at each trial readiness conference and reported that Kia was not ready for trial because its trial attorney, Brian Takahashi, was engaged in another trial.
Bryan C. Altman of Altman Law attended the first day of trial on June 29, 2016, with two attorneys from Wirtz Law, Richard M. Wirtz and Amy R. Smith. Mr. Takahashi appeared for Kia, and jury selection began. The parties were unable to empanel a jury due to the upcoming July 4 holiday, however, so the court and counsel agreed to continue trial to July 18. The court ordered all counsel to be present on July 18, but Mr. Takahashi was engaged in another trial on July 18 and was later ordered to pay Wirtz Law $2,861.24 in sanctions for his failure to appear on July 18.
On August 4, 2016, the jury returned a special verdict and awarded Warren total damages of $17,455.57.3 Although it found Kia willfully failed to repurchase or replace the vehicle, the jury did not award Warren a civil penalty. (
B. Warren‘s Requested Costs and Expenses
In October 2016, Warren filed a memorandum of costs or cost bill, seeking a total of $40,151.11 in costs and expenses. Kia moved to tax costs, challenging several of the items requested in the cost bill. The court struck two items from the cost bill: (1) Warren‘s prejudgment interest claim of $9,832.46 on the $17,455.57 award, and (2) $5,882 for the costs of court reporter‘s transcripts of the trial. Thus, Warren was awarded $24,436.65 in total costs and expenses.
C. The Motion for Attorney Fees
In December 2016, Warren filed a motion for attorney fees, seeking $351,055.26 in lodestar fees (the number of attorney hours worked times the attorneys’ hourly rates), plus a lodestar multiplier of 1.5, or an additional $175,527.63, for total requested fees of $526,582.89. The $351,055.26 lodestar figure is comprised of $111,480 for OM Law, $56,576.50 for Altman Law, and $182,998.76 for Wirtz Law. In her motion, Warren argued that the nature and complexity of her case, the skills of her attorneys, and her contingency fee arrangements with her attorneys warranted all of the requested fees. Warren also argued that Kia had engaged in “aggressive” and “scorched earth” litigation tactics, necessitating many of the requested lodestar fees.
OM Law charged for 348.4 hours at hourly rates of $225 to $500, resulting in total fees of $111,480. Eleven attorneys, including Messrs. Mikhov and Kirnos, worked on the case for OM Law. Mr. Mikhov claimed the hourly rates charged were reasonable
because they were consistent with the rates charged by other attorneys who litigate consumer matters, and he submitted evidence that OM Law had been awarded fees in other cases based on similar rates. Mr. Mikhov also argued that lemon law cases are not “simple actions“; rather, they require “a specialized understanding of the full scope of consumer protection laws,” the “intricacies of automobiles and a lexicon associated with them,” and knowledge of “manufacturers’ and dealers’ protocols for repairing vehicles.” Mr. Mikhov also pointed out that OM Law‘s billing reflected a substantial amount of uncharged time.
Altman Law charged for 136.17 total hours at hourly rates of $650 for Mr. Altman and $450 for two associates, resulting in its total bill of $56,576.50. Mr. Altman acknowledged that some of the work he and his associates performed “was duplicative or ultimately unnecessary insofar as [he] was not trial counsel at the trial“; thus, he deducted $30,598.50 from his invoice which represented “significant work performed in preparation for trial” that was not being charged.
Wirtz Law charged for 508.40 total hours, including 188 hours for Mr. Wirtz at an average hourly rate of $451.50, and 247.4 hours for Ms. Smith at an average hourly rate of $333.23. These hourly rates charged are lower than Mr. Wirtz‘s usual hourly rates of $500 and Ms. Smith‘s usual hourly rate of $400, when these attorneys’ uncharged time was taken into account. Two other attorneys at Wirtz Law charged for a total of 73 hours at average hourly rates of $247.13 and $300, also lower than these attorneys’ usual hourly rates of $300 and $400 due to uncharged time. A paralegal worked 7.50 hours at no charge and a legal support person worked 4.30 hours for a total charge of $400.
Wirtz Law‘s total bill of $182,998.76 included a deduction of $2,861.24 for the sanctions Kia paid to Wirtz Law; otherwise the bill would have been
In opposing the motion, Kia claimed the hours and rates charged by Warren‘s three law firms were excessive, given that this was a “simple lemon law case,” and 16 attorneys from three different law firms had worked on the case. Kia argued this was a “classic case of excessive billing due to staffing a case with too many attorneys resulting in duplicative, inefficient work.” Kia asked the court to limit the attorney fee award to $180,000 for all three firms.
D. The Trial Court‘s Rulings on the Attorney Fee and Cost Motions
A combined hearing on the attorney fee motion and the motion to tax costs was held on March 20, 2017. Following the hearing, the court took the matter under submission and ultimately awarded Warren $115,848.24 in attorney fees and $24,436.65 in costs. The trial judge who ruled on the motions (Judge Pacheco) was the same judge who had presided at trial.
At the hearing, Warren‘s counsel, Mr. Kirnos, pointed out that trial courts in three other recent cases had awarded similar amounts of attorney fees against Kia, namely, $270,000, $280,000, and a “conditional ruling” awarding $350,000. Mr. Kirnos also pointed out that, in Goglin, supra, 4 Cal.App.5th at pages 473 and 474, the trial court awarded $180,000 in attorney fees, and the Goglin court upheld the trial court‘s approval of a $575 hourly attorney fee rate as appropriate.
Mr. Kirnos stressed that “drastic” reductions had been made to the attorneys’ billings in order to eliminate duplicative work and account for “the musical chairs” that were played to get the case to trial. He also cited several examples of Kia‘s “scorch” and “burn” litigation tactics which caused Warren to incur substantial fees, including a motion for summary judgment and a requested spoliation instruction, both of which Mr. Kirnos argued were “dead on arrival.” Mr. Kirnos said he had never been involved in a case that had been as “heavily litigated” as this one, and he argued this was not “an easy case to try.” The court noted there was “a disconnect” between the verdict amount of “$17,000” and the over $500,000 in requested attorney fees, and said it believed its tentative award of $115,848.24 in attorney fees was “generous.” The court said: “Well, I guess in the back of my head I‘m
In response, Mr. Kirnos told the court, “proportionality is inappropriate“—that is, it is error to tie an attorney fee award to the verdict. The court responded, “I‘m not saying that [proportionality is] the basis of my ruling,” but the disconnect between the verdict and the fee request does not “rub right” with the court. The court acknowledged there were “a lot of witnesses and a lot of testimony” at trial, and all three firms “did a lot of work,” but stressed it was ”three firms that did a lot of work, three firms.” (Italics added.) The court asked Mr. Kirnos whether $350,000 in attorney fees would have been incurred by a single law firm, and Mr. Kirnos explained that two firms are usually involved in a consumer warranty case that goes to trial—the firm that initially takes the case, “works on settlements, deals with motions to compel,” and takes “some of the depositions.” Then a second firm “get[s] in at the end” and tries the case with a “very senior trial attorney” like Messrs. Wirtz or Altman.
In ruling on the motion, the court wrote: “The three firms billed a total of $351,055.26. This is an excessive amount for a non-complex case. The court will exercise its discretion and reduce this amount to 33%, or $115,848.24, of the original requested amount. This amount, while still much more than the $17,455.57 award, more accurately reflects the reasonable amount of attorneys fees in a case which was not particularly complex and which was handled by counsel experienced in this area of law. Plaintiff has not demonstrated that this many attorneys, at these high rates, were necessary or reasonable to justify her requested billed amount. Additionally, despite counsel[‘]s argument that they carefully avoided duplication between the 3 firms, the court is not convinced that the repetitiveness of these types of cases would necessarily require the amount of time requested.” (Italics added.)
Next, the court addressed the requested lodestar multiplier of 1.5. The court acknowledged that case law required the court to first “determine a touchstone or lodestar figure based on a careful compilation of the actual time spent and reasonable hourly compensation for each attorney,” and that the lodestar figure “may then be augmented or diminished by taking various relevant factors into account, including (1) the novelty and difficult[y] of the questions involved and the skill displayed in presenting them; (2) the extent to which the nature of the litigation precluded other employment by the attorneys; and (3) the contingent nature of the fee award, based on the uncertainty of prevailing on the merits and of establishing eligibility for the award.”
III. DISCUSSION
A. The Court Abused Its Discretion in Applying a 33% Negative Multiplier to Warren‘s Lodestar Attorney Fees of $351,055.26
1. Applicable Legal Principles, Overview
The Song-Beverly Act is “‘manifestly a remedial measure, intended for the protection of the consumer.‘” (Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985, 990.) To this end,
The “plain wording” of
The lodestar figure may then be adjusted based on factors specific to the case, in order to fix the fee at the fair market value of the legal services provided. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 [“The lodestar is the basic fee for comparable legal services in the community.“]; Serrano v. Priest (1977) 20 Cal.3d 25, 49.) These case-specific, lodestar adjustment factors may include, without limitation: “(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award. [Citation.]” (Ketchum v. Moses, supra, at p. 1132.) The “procedural demands” of the case may also be considered. (Nightingale v. Hyundai Motor America, supra, 31 Cal.App.4th at p. 104.) The lodestar adjustment method “anchors the trial court‘s analysis to an objective determination of the value of the attorney‘s services,” and thus ensures that the amount awarded is not arbitrary. (PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1095.) A prevailing buyer in an action arising under the Song-Beverly Act has the burden of establishing that his or her requested attorney fees were “‘allowable,‘” “‘reasonable in amount,‘” and “‘reasonably necessary to the conduct of the litigation.‘” (Goglin, supra, 4 Cal.App.5th at p. 470.)
We review the trial court‘s attorney fee award under the Song-Beverly Act for an abuse of discretion, and in doing so we are guided by settled principles. (Goglin, supra, 4 Cal.App.5th at p. 470.) “‘We presume the trial court‘s attorney fees award is correct, and “[w]hen the trial court substantially reduces a fee or cost request, we infer the court has determined the request was inflated.” [Citation.] “The ‘experienced trial judge is the best judge of the value of professional services rendered in his [or her] court, and while his [or her] judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.“‘” [Citation.]” (Ibid.)
2. Analysis
Warren claims the court abused its discretion in applying a negative 33% multiplier to her lodestar figure of $351,055.26, resulting in a fee award of $115,848.24, or one-third of the lodestar fees billed by Warren‘s three law
Additionally, Warren claims that a court abuses its discretion when it ties an attorney fee award to a proportion of the prevailing buyer‘s damages award in an action arising under the Song-Beverly Act. She claims a rule of proportionality is inconsistent with the legislative policy, expressed in
We agree that these claims have merit. As we explain, it is inappropriate and an abuse of a trial court‘s discretion to tie an attorney fee award to the amount of the prevailing buyer/plaintiff‘s damages or recovery in a Song-Beverly Act action, or pursuant to another consumer protection statute with a mandatory fee-shifting provision. (See Graciano, supra, 144 Cal.App.4th at p. 164.) Thus, when a trial court applies a substantial negative multiplier to a presumptively accurate lodestar attorney fee amount, the court must clearly explain its case-specific reasons for the percentage reduction. (Kerkeles, supra, 243 Cal.App.4th at pp. 102-104.) If, as occurred here, the reasons for the reduction include tying the fee award to some proportion of the buyer‘s damages recovery, the court abuses its discretion.
Graciano is instructive on the application of a proportionality rule, or the practice of tying an attorney fee award to the plaintiff‘s damages or settlement recovery. The plaintiff, Graciano, was awarded substantially reduced attorney fees, not under the Song-Beverly Act, but under two other consumer protection statutes with mandatory fee shifting clauses—the Automobile Sales Finance Act (ASFA,
A jury had awarded Graciano $11,191.40 for the defendant‘s ASFA and CLRA violations, and, for purposes of punitive damages, found the defendant violated the CLRA by engaging in conduct with malice, oppression, and fraud. (Graciano, supra, 144 Cal.App.4th at p. 147.) Before the jury began deliberating Graciano‘s punitive damages claim, the parties settled the case
The trial court awarded Graciano only $27,570 in attorney fees, even though she had prevailed on her ASFA and CLRA claims. (Graciano, supra, 144 Cal.App.4th at p. 147.) In calculating the $27,570 fee, the trial court reduced the hourly rates of Graciano‘s three attorneys to a blended rate of $250, less than their requested hourly rates of $350, $275, and $270, then applied the $250 rate to the total hours expended of 367.6, resulting in a revised lodestar figure of $91,900. (Id. at p. 148.) Next, the trial court applied a negative multiplier of .30, resulting in the $27,570 fee award ($91,900 times .30 equals $27,570). (Id. at p. 162.) The trial court noted that the settlement was for $45,000 plus any attorney fees the court might award, and contingency fee agreements commonly required the plaintiff to pay approximately 40 percent of the recovery. (Ibid.) Thus, if $45,000 represented Graciano‘s 60 percent portion of the total settlement, then 40 percent of the settlement would be $30,000 ($75,000 times .40 equals $30,000; $75,000 times .60 equals $45,000). The application of the .30 negative multiplier to the adjusted lodestar figure of $91,900 resulted in the fee award of $27,570, which the trial court found was “within the market place range of fees.” (Ibid.)
The Graciano court found two problems with the trial court‘s fee analysis which are potentially relevant here on remand. First, the trial court‘s reduction of the attorneys’ requested hourly rates to $250 was an abuse of the trial court‘s discretion. (Graciano, supra, 144 Cal.App.4th at pp. 154.) Graciano‘s attorneys had adduced unchallenged evidence that their requested hourly rates were “well within the range charged” by attorneys engaged in similar practice areas and were appropriate and reasonable in the relevant geographical area. (Id. at p. 155.) The defendant did not dispute this evidence, but argued the court should base the hourly rates on Imperial County standards. (Ibid.) The trial court limited the hourly rates to $250 because this was the hourly rate set or allowed for expert testimony in Imperial County, pursuant to local rule 3.12. (Id. at pp. 155-156.) This was an abuse of discretion, both because the trial court did not objectively determine “the prevailing rate in the community for comparable professional legal services” (id. at p. 156; PLCM Group v. Drexler, supra, 22 Cal.4th at p. 1096 [reasonable hourly rate is that prevailing in community for similar work]) and because “Graciano‘s unrebutted declarations established the prevailing rates in the region for attorneys with comparable skills and expertise, and her evidence compelled a finding that the
Second, the Graciano court faulted the trial court‘s application of the .30 negative multiplier to the adjusted lodestar fees of $91,900, because the trial court‘s goal was to arrive at a reasonable contingency fee of approximately 40 percent of Graciano‘s settlement recovery of $45,000 plus attorney fees. (Graciano, supra, 144 Cal.App.4th at pp. 148, 161-164.) The court explained that, “because this matter involve[d] an individual plaintiff suing under consumer protection statutes involving mandatory fee-shifting provisions, the legislative policies are in favor of Graciano‘s recovery of all attorney fees reasonably expended, without limiting the fees to a proportion of her actual recovery.” (Id. at p. 164, italics added.) The court drew a direct analogy to attorney fee applications in civil rights cases: “The circumstances here are analogous to those addressed by the United States Supreme Court in the civil rights context: ‘A rule that limits attorney‘s fees in civil rights cases to a proportion of the damages awarded would seriously undermine Congress’ purpose in enacting [
the private market for legal services failed to provide many victims of civil rights violations with effective access to the judicial process. [Citation.] These victims ordinarily cannot afford to purchase legal services at the rates charged by the private market. . . . Moreover, the contingent fee arrangements that make legal services available to many victims of personal injuries would often not encourage lawyers to accept civil rights cases, which frequently involve substantial expenditures of time and effort but produce only small monetary recoveries.’ [Citation.] ‘A rule of proportionality would make it difficult, if not impossible, for individuals with meritorious civil rights claims but relatively small potential damages to obtain redress from the courts.’ [Citation.]” (Ibid.)
Graciano’s reasoning applies with equal force here, a case involving a prevailing buyer seeking attorney fees under the Song-Beverly Act, another consumer protection statute which, like the CRLA and the ASFA, includes a mandatory fee-shifting provision. (
The court properly declined to reduce the requested hourly rates of Warren’s attorneys and properly anchored its attorney fee award to Warren’s requested lodestar fees of $351,055.26. Warren adduced unrebutted evidence that her attorneys’ requested hourly rates were within the range of the hourly rates charged by other plaintiffs’ attorneys practicing consumer law. (Graciano, supra, 144 Cal.App.4th at p. 156 [reasonable hourly rate is that prevailing in community for similar work]; Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 396 [verified attorney time records are presumptively correct].) Kia did not rebut Warren’s evidence that her attorneys’ hourly rates were reasonable. Rather, Kia claimed the hourly rates of Warren’s plaintiff’s attorneys should be limited to the lower hourly rates charged by Kia’s defense attorneys. This was not a good comparison, given that Warren’s plaintiff’s attorneys’ work pursuant to contingency arrangements and Kia’s defense attorneys do not. Kia also generally criticized each time entry of Warren’s attorneys as excessive and also generally criticized the overall time Warren’s attorneys spent on the case as excessive. But the aggregate hours expended by Warren’s attorneys may appropriately be adjusted by applying a negative multiplier to the lodestar figure. (Graciano, supra, at pp 159-161 [negative multipliers are appropriate in cases involving mandatory fee-shifting statutes].)
The problem with the trial court’s analysis is that we are unable to distinguish the extent to which the court’s choice of the 33% negative multiplier was based on the court’s expressed and erroneous goal of arriving at a fee award that was roughly proportional to Warren’s modest $17,455.57 damages award. The court erred to the extent it selected the negative multiplier to make the fee award roughly proportionate to Warren’s modest damages award. But the court was within its discretion to the extent it
It is clear that Warren’s excessive lodestar fee occurred principally because her original attorneys, OM Law, were unable or unwilling to try the case. As a result, OM Law had to bring in not one, but two other law firms, namely, Altman Law after it became clear the case had to be tried, and Wirtz Law after Mr. Altman was unavailable after the trial was continued. Warren also had three attorneys representing her at the eight-day trial. As the court found, this was excessive and resulted in duplicative charges beyond the uncharged time reflected in counsel’s billing statements. That said, the delay in the trial and the need to bring in Wirtz Law, and Mr. Wirtz as Warren’s lead trial counsel, was due to Kia, whose initial trial attorney, Mr. Takahashi, was sanctioned for not being available when the trial was to resume. Warren also adduced unrebutted evidence that Kia engaged in “scorched earth” litigation tactics that were responsible for many of the hours Warren’s attorneys expended before trial. On remand, the court should consider all of these and other relevant circumstances in selecting an appropriate multiplier in order to determine a reasonable fee award for Warren. (Nightingale v. Hyundai Motor America, supra, 31 Cal.App.4th at p. 104 [complexity of case and its procedural demands are relevant in selecting lodestar multiplier].)
We have effectively applied “heightened scrutiny” to the court’s selection of the 33% negative multiplier to Warren’s lodestar figure. This was appropriate. In consumer law cases, as in civil rights cases, when a “‘voluminous fee application’” is made, as it was here, the court may, as it did here, “‘make across-the-board percentage cuts either in the number of hours claimed or in the final lodestar figure.’” (Kerkeles, supra, 243 Cal.App.4th at p. 102; Gates v. Deukmejian (9th Cir. 1992) 987 F.2d 1392, 1399.) But the court must clearly explain its reasons for choosing the particular negative multiplier that it chose; otherwise, the reviewing court is unable to determine that the court had valid, specific reasons for its across-the-board percentage reduction. (Kerkeles, supra, at pp. 102-104 [“‘We can’t defer to reasoning that we can’t review . . . .’”].) Here, the trial court clearly explained its reasons for selecting the 33% negative lodestar multiplier. But that explanation shows the court chose the multiplier, in part, to arrive at a fee award that was roughly proportionate to Warren’s $17,455.57 damages award. As discussed, this was error and must not be repeated on remand. (See Mountjoy v. Bank of America, N.A. (2016) 245 Cal.App.4th 266, 280-281 [70 percent negative lodestar multiplier erroneously applied based on evidence that 70 percent of counsel’s time entries were “flawed”].)
Warren sought to recover $40,151,11 in costs and expenses from Kia. (
Warren claims the court erroneously disallowed both items. We agree that the $5,882 claim for trial transcripts was erroneously disallowed. (
1. The $5,882 Trial Transcripts Expense Should Have Been Allowed
In disallowing Warren’s $5,882 claim for trial transcripts, the court reasoned that, under
As explained in Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, in enacting
Additionally, it is indisputable that Warren “reasonably incurred” the $5,882 cost of the trial transcripts “in connection with the . . . prosecution of [the] action.” (
2. Warren’s Prejudgment Interest Claim Was Properly Denied
Warren sought prejudgment interest of $9,832.46 on her $17,455.57 jury award, calculated at the legal rate of 10 percent per annum, from January 11, 2011, the date she purchased her vehicle, through September 9, 2016, the date judgment was entered. (
(a) Section 3287, Subdivision (a)
Section 3287, subdivision (a) allows a person to recover prejudgment interest on “damages certain, or capable of being made certain by calculation” from the day such damages are certain or capable of being made certain.6 “[T]he court has no discretion, but must award prejudgment interest upon request, from the first day there exists both a breach and a liquidated claim.” (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828.) Prejudgment is an element of damages, not a cost. (Id. at p. 830.) The Song-Beverly Act does not preclude an award of prejudgment interest under
Warren claims the entire $17,455.57 amount of her jury award was certain or capable of being made certain “by looking at the sale contract.” We
As the Duale court explained: “‘“Damages are deemed certain or capable of being made certain within the provisions of subdivision (a) of section 3287 where there is essentially no dispute between the parties concerning the basis of computation of damages if any are recoverable but where their dispute centers on the issue of liability giving rise to damage.” [Citations.]’ [Citation.] Thus, ‘“‘[t]he test for recovery of prejudgment interest under [Civil Code] section 3287, subdivision (a) is whether defendant actually know[s] the amount owed or from reasonably available information could the defendant have computed that amount. [Citation.]’ [Citations.] ‘The statute . . . does not authorize prejudgment interest where the amount of damage, as opposed to the determination of liability, “depends upon a judicial determination based upon conflicting evidence and it is not ascertainable from truthful data supplied by the claimant to his debtor.” [Citations.]’ [Citation.] Thus, where the amount of damages cannot be resolved except by verdict or judgment, prejudgment interest is not appropriate. [Citation.]” [Citation.]’ [Citations.]” (Duale, supra, 148 Cal.App.4th at p. 729.)
The trial court here disallowed Warren’s prejudgment interest claim for the same reasons cited in Duale. In denying Warren’s prejudgment interest claim, the court found the jury had to determine “(1) whether any of the many defects alleged in the complaint represented a nonconformity, (2) whether any such nonconformity substantially impaired [the] use, value, or safety of the vehicle, and (3) then to determine—for any such nonconformity—the mileage at which [Warren] first presented the car to [Kia] for repair.” (See Duale, supra, 148 Cal.App.4th at p. 729.) Warren has not shown that these warranty-related issues were not disputed at trial. Indeed, the record does not include any trial transcripts, even though Warren’s counsel spent $5,882 to obtain trial transcripts. In addition, the jury’s special verdict supports the trial
Even if Warren’s breach-of-warranty damages were certain or capable of being made certain either from the sales contract or other information available to Kia before trial, Warren has not shown that her incidental and consequential damages of $2,707.10—a key component of her $17,455.57 jury award8—were certain or capable of being made certain before trial—based on any information available to Kia. As indicated, prejudgment interest is not authorized under
Warren necessarily incurred her incidental and consequential damages for Kia’s breach of the vehicle’s express or implied warranties after she purchased the vehicle. Thus, those damages could not be ascertained “by looking at the sale contract.” In addition, Kia’s
Warren also claims the court abused its discretion in refusing to award her prejudgment interest under
At the hearing on Kia’s motion to tax costs and Warren’s motion for attorney fees, Warren’s counsel asked the court to exercise its discretion and award Warren prejudgment interest under
IV. DISPOSITION
The orders awarding attorney fees, costs, and expenses are reversed, and the matter is remanded to the trial court with directions to (1) increase Warren’s cost and expenses award by the $5,882 expense incurred for trial transcripts, and (2) determine a reasonable attorney fee award consistent with the views expressed in this opinion. Warren shall recover her costs and attorney fees on appeal. (Graciano, supra, 144 Cal.App.4th at p. 165 [“‘Statutory authorization for the recovery of attorney fees incurred at trial necessarily includes attorney fees incurred on appeal unless the statute specially provides otherwise’”];
CERTIFIED FOR PUBLICATION
FIELDS
J.
We concur:
MILLER
Acting P. J.
SLOUGH
J.