Karapetian v. Kia Motors Am., Inc.

• Decision Date: 22 December 2013
• Docket Number: Case No. SACV 08–00227–CJC (RNBx).
• Parties: Mamikon KARAPETIAN, Plaintiff, v. KIA MOTORS AMERICA, INC., Defendant.
• Court: U.S. District Court — Central District of California

970 F.Supp.2d 1032

Mamikon KARAPETIAN, Plaintiff,

v.KIA MOTORS AMERICA, INC., Defendant.

Case No. SACV 08–00227–CJC (RNBx).

United States District Court,

C.D. California,

Southern Division.

Dec. 22, 2013.

Lucy Kasparian, California Lemon Law Center Glendale, CA, Martin W. Anderson, Santa Ana, CA, for plaintiff.

Anthony E. Sonnett, and Jocelyn A. Julian, Lewis, Brisbois, Bisgaard & Smith, LLP, Los Angeles, CA, for defendant.

ORDER GRANTING IN PART PLAINTIFF'S MOTION ON REMAND FOR AN ORDER REIMBURSING PLAINTIFF'S ATTORNEY FEES, COURT COSTS, AND LITIGATION EXPENSES AND GRANTING IN PART PLAINTIFF'S MOTION FOR ATTORNEY FEES ON APPEAL

CORMAC J. CARNEY, District Judge.

INTRODUCTION

This is a lemon law case involving a car purchased in 2004. The case settled for approximately $16,000 in restitution for Mr. Karapetian's 2004 Kia Sedona and $16,000 in incidental damages. Plaintiff Mamikon Karapetian now seeks an award of $215,336.73 in attorneys' fees and costs as the prevailing party under the Song—Beverly Consumer Warranty Act. On November 18, 2010, 751 F.Supp.2d 1139 (C.D.Cal.2010), the Court ruled on Mr. Karapetian's first motion for attorneys' fees. (Dkt. No. 103 [“Nov. 18, 2010 Order”].) After considering the evidence and arguments of counsel, the Court concluded that the parties' February 2010 settlement was essentially the same, in relative terms, as Defendant Kia Motors America, Inc.'s (“Kia”) offer pursuant to Federal Rule of Civil Procedure 68 almost a year and a half earlier and prior to the time that Mr. Karapetian's attorneys incurred the substantial majority of the fees he then requested. ( See id. at 1140–41.) Because the Court found that Mr. Karapetian's continued litigation of the case following Kia's November 2008 offer was unreasonable, the Court held that Mr. Karapetian was entitled only to attorneys' fees incurred prior to that point.

In particular, the Court found that both the February 2010 settlement and Kia's November 2008 offer provided for full restitution and repurchase of Mr. Karapetian'svehicle. (Id. at 1143.) As to incidental damages, the Court found that both Kia's November 2008 offer and the February 2010 settlement permitted Mr. Karapetian to recover incidental damages according to proof. (Id.) Following the parties' February 2010 settlement, Mr. Karapetian offered proof of incidental damages to Kia and Kia agreed to pay him approximately $14,000 in incidental damages according to his proof. (Id. at 1143 n. 3.) The Court found that to the extent the $14,000 in incidental damages as of February 2010 was greater than Mr. Karapetian would have received under Kia's November 2008 offer, that was necessarily so because Mr. Karapetian refused Kia's November 2008 offer and continued to make payments on the car loan, incur interest, and suffer incidental damages during the approximately 15 months between November 2008 and February 2010. (Id. at 1143–44.) Of course, the amount of incidental damages according to proof as of November 2008 was never determined by the parties or the Court because Mr. Karapetian did not accept Kia's November 2008 offer.

Mr. Karapetian appealed, and the Court of Appeals for the Ninth Circuit reversed and remanded. See Karapetian v. Kia Motors Am., Inc., 539 Fed.Appx. 814, 816, 2013 WL 4713914, at *2 (9th Cir.2013). The Ninth Circuit found that “[n]othing in the 2008 offer suggests that K[ia] would have paid $14,000 in incidental damages.” Id. at 816, at *2. The Ninth Circuit did not address this Court's conclusion that any difference in the amount of incidental damages according to proof in November 2008 and the amount of incidental damages according to proof in February 2010 was a function of the continuing accrual of incidental damages over the 15 months. The Ninth Circuit further concluded that the “additional $14,000 [Mr.] Karapetian recovered under the 2010 settlement is substantial.” Id. Based on these findings, the Ninth Circuit remanded the matter to this Court “to calculate an appropriate award of attorneys' fees” consistent with its disposition and California Civil Code section 1794(d). Separately, the Ninth Circuit transferred Mr. Karapetian's motion before it for attorneys' fees on appeal to this Court. ( See Dkt. No. 119.) Mr. Karapetian now moves on remand for attorneys' fees and costs incurred at the District Court; in the same motion, he also seeks attorneys' fees incurred on appeal. (Dkt. No. 123.)

Having considered the parties' evidence and arguments, and in light of the Ninth Circuit's remand order, the Court concludes that Mr. Karapetian is entitled to fees for a substantial portion of the time expended by his attorneys. The Court has identified numerous billing entries, however, that were not reasonably incurred. Accordingly, Mr. Karapetian's motion for attorneys' fees and costs incurred at the District Court and for attorneys' fees incurred on appeal is GRANTED IN PART.¹

ANALYSIS

California's Song—Beverly Consumer Warranty Act, Cal. Civ.Code § 1790 et seq., provides that a prevailing buyer “shall be allowed by the court 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) (emphasis added). The inquiry is “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 Am., 31 Cal.App.4th 99, 104, 37 Cal.Rptr.2d 149 (1994); see also Doppes v. Bentley Motors, Inc., 174 Cal.App.4th 967, 998, 94 Cal.Rptr.3d 802 (2009). “If the time expended or the monetary charge being made for the time expended are not reasonable under all the circumstances, then the court must take this into account and award attorney fees in a lesser amount.” Nightingale, 31 Cal.App.4th at 104, 37 Cal.Rptr.2d 149 (emphasis added); see also Levy v. Toyota Motor Sales, U.S.A., Inc., 4 Cal.App.4th 807, 815–16, 5 Cal.Rptr.2d 770 (1992) (prevailing party not necessarily entitled to all claimed attorneys' fees).

The prevailing buyer, Mr. Karapetian, bears the burden of demonstrating all of the following: “the [attorneys'] fees incurred were allowable, were reasonably necessary to the conduct of the litigation, and were reasonable in amount.” Nightingale, 31 Cal.App.4th at 104, 37 Cal.Rptr.2d 149 (quoting Levy, 4 Cal.App.4th at 816, 5 Cal.Rptr.2d 770) (internal quotation marks omitted). The Court retains discretion to reduce the fee award where fees were not reasonably incurred. See Ketchum v. Moses, 24 Cal.4th 1122, 1132, 104 Cal.Rptr.2d 377, 17 P.3d 735 (2001) (“ ‘[P]adding’ in the form of inefficient or duplicative efforts is not subject to compensation.”); Gorman v. Tassajara Dev. Corp., 178 Cal.App.4th 44, 101, 100 Cal.Rptr.3d 152 (2009) (“A reduced [attorneys' fees] award might be fully justified by a general observation that an attorney overlitigated a case or submitted a padded bill or that the opposing party has stated valid objections.”).

In its Order of November 18, 2010, the Court concluded that the hourly rates of $425.00 and $350.00 charged by Mr. Karapetian's counsel were reasonable. (Nov. 18, 2010 Order at 1142–43.) The Court's finding that the hourly rates charged by Mr. Karapetian's counsel were reasonable remains unchanged. Nevertheless, Mr. Karapetian still bears the burden of demonstrating that “fees incurred were allowable, were reasonably necessary to the conduct of the litigation, and were reasonable in amount.” Nightingale, 31 Cal.App.4th at 104, 37 Cal.Rptr.2d 149 (quoting Levy, 4 Cal.App.4th at 816, 5 Cal.Rptr.2d 770) (internal quotation marks omitted).

After reviewing the billing records submitted by Mr. Karapetian, as well as Kia's objections and Mr. Karapetian's responses thereto, the Court concludes that Mr. Karapetian is entitled to the fees that he requests, except as follows:

First, Mr. Karapetian has not met his burden of proof with respect to entries that prospectively estimate time to be spent on particular activities. For example, one entry seeks one hour of fees for “ESTIMATE—Receive Payment of award on fee motion.” (Dkt. No. 84 [Kia's Mem. of P. & A. in Opp'n to Pl.'s Mot. for Att'y Fees (“Def.'s Opp'n”) ] Ex. P [“Disputed Billing Entries”] at 5.) The Court fails to understand how it could take one hour to carry out the administrative task of receiving a payment. Even if it were possible for the task to take an hour, this task undoubtedly took place more than three years ago. Thus, there is no reason why Mr. Karapetian cannot submit evidence of the amount of hours actually worked by his lawyers. Similarly, another entry seeks 5.0 hours for an estimated “Time for Completion of Case.” ( See id. at 19; Dkt. No. 90 [Pl.'s Reply to Def.'s Opp'n to Pl.'s Mot. for Att'y Fees (“Pl.'s Reply”) ], Decl. of Lucy Kasparian [“Kasparian Reply Decl.”] ¶ 16 (“The remaining 5.0 hours in that entry is my estimate for the time it will take to complete the case.”).) Again, there is no reason why this estimate as of June 2010 cannot be updated and replaced with evidence of time actually incurred. With respect to such estimates, the Court cannot determine whether such work was actually performed, let alone whether the work was “reasonably necessary to the conduct of the litigation.” Nightingale, 31 Cal.App.4th at 104, 37 Cal.Rptr.2d 149. The Court therefore deducts 1.0 hours of work performed by Mr. Anderson (a $425.00 reduction) and 5.0 hours of work performed by Ms. Kasparian (a $1,750.00 reduction).

Second, the Court agrees with Kia that Mr. Karapetian's counsel spent an unreasonable amount of time attending vehicle inspections and drafting notes regarding the inspections—a total of 15.42 hours, for a bill of $5,397. ( See Disputed Billing Entries at 11–12.) Given the...