Graciano v. Robinson Ford Sales, Inc.

• Decision Date: 26 October 2006
• Docket Number: No. D047369.,D047369.
• Court: California Court of Appeals Court of Appeals
• Parties: Alba GRACIANO, Plaintiff and Appellant, v. ROBINSON FORD SALES, INC., Defendant and Respondent.

50 Cal.Rptr.3d 273

144 Cal.App.4th 140

Alba GRACIANO, Plaintiff and Appellant, v. ROBINSON FORD SALES, INC., Defendant and Respondent.

No. D047369.

Court of Appeal, Fourth District, Division 1.

October 26, 2006.

Rosner, Law & Mansfield, Hallen D. Rosner, San Diego, Christopher P. Barry and John W. Hanson for Plaintiff and Appellant.

Paul A. Brennan, San Juan Capistrano, for Defendant and Respondent.

O'ROURKE, J.

Plaintiff Alba Graciano appeals from an order awarding her attorney fees following her post-liability verdict settlement with defendant Robinson Ford Sales, Inc. (Robinson), arising out of claims she made after she purchased an automobile from that dealership. Graciano sued Robinson for damages and injunctive relief alleging 10 causes of action, and proceeded to trial on causes of action for violations of Civil Code section 1632,¹ the Automobile Sales Finance Act (ASFA, § 2981 et seq.), the Consumers Legal Remedies Act (CLRA, § 1750 et seq.), and the Unfair Competition Law (UCL, Bus. & Prof.Code, § 17200 et seq.). After the jury made findings in Graciano's favor on those causes of action and found Robinson violated the CLRA with malice, fraud and oppression, the parties entered into a settlement and Graciano moved for recovery of approximately $235,000 in attorney fees under the CLRA and ASFA. The trial court awarded Graciano attorney fees, but reduced her request to $27,570 for, among other things, Graciano's and Robinson's status as "equally prevailing parties," its determination of a reasonable hourly rate for Graciano's counsel, and its application of a 1.3 negative multiplier.

Graciano appeals, contending the trial court erred in its attorney fee ruling by (1) capping the attorney fee award to a percentage of Graciano's settlement recovery; (2) finding Robinson had equally prevailed in the litigation, thus justifying application of a negative multiplier; (3) using a negative multiplier in the absence of unusual or special circumstances justifying such a reduction; and (4) imposing a single hourly rate for all of Graciano's attorneys with minimal positive multipliers for her success at trial. Because Graciano's contentions have merit, we reverse the order and remand the matter for redetermination of a reasonable attorney fee award in accordance with the principles stated in this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

In October 2001, Graciano, a non-English speaking resident of Calexico, purchased a Ford Focus from Robinson after a salesman offered her a zero-percent annual percentage rate deal and quoted her a sales price of approximately $12,000. Although all negotiations and discussions were conducted in Spanish, the salesman presented Graciano with a purchase contract in English. Graciano signed the contract, reminding the salesman she did not speak English and telling him she trusted he would protect her. The purchase price listed on the sales contract, however, was $17,865, which included over $2,800 in undisclosed "negative equity" from another vehicle Graciano traded in at the time of her purchase. Negative equity refers to a situation when a person owes more on a vehicle than the vehicle is actually worth: the loan value exceeds the value of the vehicle.

In May 2003, Graciano sued Robinson and Ford Motor Company (Ford). As against Robinson, Graciano's complaint asserted causes of action for violation of section 1632, requiring delivery of an unexecuted Spanish translation of a contract negotiated in Spanish (first cause of action); violations of the ASFA, CLRA, and UCL (second, third and fourth causes of action); declaratory and injunctive relief (fifth cause of action); negligent misrepresentation (sixth cause of action); negligent repair (eighth cause of action); rescission (ninth cause of action); and entitlement to punitive damages (tenth cause of action). As against both Ford and Robinson, Graciano alleged a violation of section 1790 et seq., the Song-Beverly Consumer Warranty Act (Song-Beverly) (seventh cause of action). Graciano settled her Song-Beverly claim against Ford in November 2003.

In March 2004, after unsuccessfully seeking leave to file a class action complaint, Graciano filed a first amended complaint in which she reasserted the same causes of action but added a claim for damages under the CLRA.²

The matter was initially set for trial on May 26, 2004. Thereafter the trial date was rescheduled twice. On November 8, 2004, the court set trial for April 20, 2005. On the day of trial, Graciano filed a request for dismissal without prejudice of her fifth, sixth, ninth and tenth causes of action.³ The matter proceeded to trial on Graciano's causes of action under section 1632, the ASFA, the CLRA and the UCL. The court was to determine Graciano's claims under section 1632 and the UCL with the assistance of advisory findings from the jury.

The jury returned verdicts in Graciano's favor on her claims under the ASFA and CLRA, and also found that Robinson violated the CLRA by engaging in conduct with malice, oppression and fraud for purposes of punitive damages. It awarded Graciano $11,191.40 for Robinson's ASFA and CLRA violations. The jury also rendered numerous advisory findings for purposes of Graciano's claims under section 1632 and the UCL, including that Robinson had failed to provide a Spanish language translation of the purchase contract before Graciano signed the English language contract, and that Robinson's conduct in that regard was "unlawful."

On the day the jury was to begin deliberating the issue of the amount of punitive damages, the parties reached a settlement in which Robinson agreed to pay Graciano $45,000 in exchange for Graciano's dismissal with prejudice of all claims. The settlement agreement provided that Graciano would seek recovery of her attorney fees and costs by motion.

Asking the court to deem her the prevailing party, Graciano thereafter moved for costs and $249,365.36 in attorney fees expended in the litigation (as well as an additional amount for fees incurred on the attorney fee motion) under the attorney fee provisions of the ASFA and CLRA. Specifically, Graciano argued she was entitled to a lodestar of $109,468.50 multiplied by 2.0 for the contingent nature of the representation, the delay in payment to counsel, the results achieved, and complexity of the issues. Robinson opposed the motion, arguing (1) the attorney fee award was discretionary given the amount of the jury award; (2) Robinson was the prevailing party on all but two of Graciano's causes of action; and (3) the requested fees and costs were not reasonable. Robinson's counsel objected to an attached declaration of Graciano's counsel, Hallen Rosner, as hearsay and also challenged counsel's fees expended in traveling to San Francisco to research issues relating to negative equity, and to the superior court in El Centro for hearings.

After obtaining supplemental briefing on various issues including the applicable hourly rate, the court issued a written order awarding Graciano $27,570 in attorney fees. Although it found Graciano had prevailed on her second and third causes of action under the ASFA and CLRA because of the size of her settlement and the jury verdict, it determined Graciano and Robinson were nevertheless "equally prevailing parties" because Graciano "was not the prevailing party on most of the ten causes of action pursued" and also because Graciano, by failing to pursue injunctive relief in her settlement, "abandoned the purported public benefit aspect of her litigation in favor of being paid about four times the amount of the jury verdict." Specifically, the court found that Graciano did not pursue her seventh cause of action under Song-Beverly or eighth cause of action for negligent repair against Robinson and that in entering into the posttrial settlement with Robinson, she chose not to pursue the injunctive relief she had requested in her third, fourth and fifth causes of action. As for Graciano's first and ninth causes of action, the court found Robinson was the prevailing party on those claims. While the court acknowledged those causes of action were based on the same conduct as alleged in the third cause of action under the CLRA, it nevertheless found the relief sought in both causes of action—rescission of the sales contract—had been effectively achieved by Graciano's pretrial settlement with Ford and that Graciano could have dismissed those claims at that time, which would have "saved herself and Defendant's counsel unproductive expenditures of legal services."

Turning to the lodestar, the court set the reasonable hourly rate for Graciano's counsel at $250 per hour based on rule 3.12 of the Superior Court of Imperial County Local Rules (local rule 3.12), which sets ordinary and customary hourly fee rates for expert witnesses. It then applied that rate to all of the 367.6 hours of legal services expended by her attorneys (amounting to $91,900 in fees) because in listing her counsel's legal services, Graciano did "not adequately allocate[ ] between those claims in which Plaintiff was successful and those in which she was not...." The court applied positive multipliers of 1.5 for the contingent nature of counsel's representation, and .1 for the results achieved by Graciano's counsel, but declined to apply any positive multiplier for novelty and complexity of the issues or delay in payment. It then applied a 1.0 negative multiplier due to the parties' status as equally prevailing parties, and a .3 negative multiplier "`to ensure the fee awarded is within the range of fees freely negotiated in the legal market place....'" Application of the lodestar and multipliers resulted in the total attorney fee award of $27,570. Graciano filed the present appeal.

DISCUSSION

I. Standard of Review

We review an order granting or denying fees for an abuse of discretion. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095, 95 Cal.Rptr.2d 198, 997 P.2d...