McCullough v. Fca U.S. LLC
| Decision Date | 09 November 2018 |
| Docket Number | D073330 |
| Court | California Court of Appeals Court of Appeals |
| Parties | WILLIAM McCULLOUGH, Plaintiff and Appellant, v. FCA US LLC, 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2015-00013501-CU-BC-CTL)
APPEAL from a postjudgment order of the Superior Court of San Diego County, Timothy B. Taylor, Judge. Reversed and remanded with directions.
Rosner, Barry & Babbitt and Hallen D. Rosner, Arlyn L. Escalante, Shaghayegh Dinata-Hanson for Plaintiff and Appellant.
Nixon Peabody and David Henry Tennant, Scott Steven Shepardson, Jennifer A. Kuenster, Lisa Caryn Schwartz-Tudzin for Defendant and Respondent.
Plaintiff and appellant William McCullough brought an action under the Song-Beverly Consumer Warranty Act () against defendant and respondent FCA US LLC (Chrysler).1 Following a bench trial, McCullough obtained a $17,163.83 damages verdict and was declared the prevailing party. He thereafter sought $125,055 in attorney fees ($83,370 in lodestar fees plus a 1.5 percent multiplier) but the trial court awarded $18,685 in attorney fees. McCullough appeals from the postjudgment attorney fee order, contending the court improperly focused on the proportionality of the fees to the damages recovered, producing a biased result; ignored applicable authority; and abused its discretion in reducing the award by 78 percent from his $83,370 request. McCullough further contends the court committed legal error by cutting off his attorney fee recovery from the date of Chrysler's December 22, 2016 Code of Civil Procedure section 998 (section 998) offer to compromise, because his total judgment, which includes $10,100.30 in prejudgment interest accrued before the section 998 offer, amounts to more than Chrysler's offer.
Because McCullough's ultimate judgment was more favorable than Chrysler's section 998 offer to compromise, he was not precluded from recovering his postoffer costs, including attorney fees, under the Act. We reverse the postjudgment order andremand the matter for the court to give McCullough the opportunity to refile his motion for attorney fees and costs.
In February 2011, McCullough purchased a new 2011 Jeep Cherokee for $51,754.03 including taxes, fees and certain options. Within four months and having driven the vehicle about 2,000 miles, it began to exhibit transmission problems. After multiple transmission repair visits, in April 2013 McCullough traded the vehicle in and received $28,000 toward a replacement vehicle, a 2013 Jeep. In January 2015, he asked Chrysler to repurchase the replacement vehicle. Chrysler rejected the offer.
In April 2015, McCullough sued Chrysler for damages, civil penalties and attorney fees under the Act. Chrysler responded by offering McCullough the "actual price paid or payable, including any incidental and consequential expenses incurred" for the vehicle, less an offset for use, plus McCullough's reasonable costs, expenses and attorney fees. McCullough did not accept the offer. Chrysler answered the complaint in May 2015, and concurrently served an offer to compromise under section 998 to pay restitution less an offset for McCullough's use, plus reasonable costs, expenses and attorney fees.2 McCullough rejected the offer, but offered to mediate the dispute. Chrysler declined mediation.
The court set the matter for trial in July 2016 but continued it to January 2017 at McCullough's request. On December 22, 2016, Chrysler served McCullough with an amended section 998 offer to pay $24,000, plus McCullough's reasonable costs, expenses and attorney fees based on actual time expended under Civil Code section 1794, subdivision (d), or as determined by the court. McCullough objected to the offer and rejected it.
McCullough waived a jury and the matter proceeded to a bench trial. Following a two-day trial, the trial court found McCullough had established a claim under the Act. The court found he did not prove substantial impairment of safety or value, but did prove substantial impairment of use. It awarded McCullough $17,163.83 in actual damages for the restitution value of the 2011 vehicle, as well as prejudgment interest as of May 7,2015, but denied him civil penalties or treble damages. The court ruled McCullough was the prevailing party entitled to file a cost memorandum and motion for reasonable attorney fees. As to fees, the court's order noted:
McCullough moved for $125,055 in attorney fees, constituting a lodestar of $83,370 based on counsels' hourly rates and time spent on the matter, plus a 1.5 multiplier of $41,685. His motion recounted the litigation efforts by his counsel, Knight Law Group, and also Richard Wirtz of Wirtz Law APC, who in March 2016 had associated into the case as trial counsel. He argued Chrysler's section 998 offer was invalid and unenforceable because (1) it was vague, ambiguous and uncertain (2) it was silent as to specific incidental and consequential damages; (3) the offer limited his right to fees by denying recovery of fees actually and reasonably incurred after the date of the offer, contradicting Civil Code section 1794, subdivision (d); (4) the offer was silent as to pre-and post-judgment interest; and (5) it required execution of an undisclosed and unattached general release. McCullough submitted declarations from attorneys Wirtz and Steve Mikhov, who set out the time and hourly rates of various attorneys and staff fromtheir law firms in the matter, including for time spent on the attorney fees motion.3 Both summarized some of the discovery matters and described trial preparation for both the June 2016 and January 2017 trial calls. Attorney Mikhov further described the attorney fees awarded in other lemon law matters. According to Mikhov, lemon law cases were not simple but required a specialized understanding of the full scope of "highly nuanced" consumer protection laws, as well as knowledge of the "intricacies of automobiles and a lexicon associated with them," how to investigate the matters, and auto manufacturers' and dealers' protocols for repairing vehicles.
McCullough separately moved for an award of $10,791.20 in prejudgment interest under Civil Code section 3287, subdivision (a), calculated from February 3, 2011, the date of the vehicle purchase, to May 18, 2017, the date of the judgment.4 Alternatively, he sought an award of $3,557.90 in discretionary prejudgment interest under Civil Codesection 3287, subdivision (b). McCullough pointed out he had asked for such interest at the legal rate in his prayer for relief. He disagreed with the court's calculation of prejudgment interest from May 7, 2015, the date of a letter from Chrysler to McCullough's counsel, arguing that damages were capable of being made certain on February 3, 2011.
Chrysler opposed both motions. Asserting McCullough made no "real attempt" to settle the case short of trial and criticizing him for retaining a second law firm to try his case, it argued the requested attorney fees were excessive, inherently duplicative and unreasonable. Chrysler argued McCullough's attorneys ignored its settlement offer so as to engage in two years of "needless" litigation using "recycled . . . work" on a case they characterized as very simple, without any particularly challenging or novel legal issues and factual hurdles. It argued McCullough's attorneys created any risk of nonpayment when they failed to accept its early settlement offer to pay full restitution plus reasonable attorney fees, costs and expenses. Chrysler asserted that counsel continued the lawsuit for the sole purpose of incurring substantial attorney fees and gambling on recovery of a civil penalty unsupported by the facts. Pointing to authority that a reduced award may be justified by overlitigation, Chrysler asked the court to apply a negative multiplier and make a downward adjustment to the lodestar figure. However, Chrysler did not provide evidence or legal authority demonstrating that McCullough's counsel's requested hourly rates were unreasonable, nor did it state how much time McCullough's attorneys should have spent on a case prepared for trial twice and tried to a favorable judgment forMcCullough. Chrysler asked the court to deny McCullough's request for prejudgment interest on the ground that damages were uncertain and not capable of calculation.
On his request for attorney fees, McCullough argued in reply that Chrysler misstated both facts and law in various ways and did not present evidence rebutting the presumption that a verified fee bill is credible, and prima facie evidence of necessarily-incurred costs, expenses and services. On his motion for prejudgment interest, he pointed out via a sworn declaration from counsel that he had offered to mediate the case in May 2015 but Chrysler had declined.
The court granted McCullough's attorney fee motion, but in doing so it found "overwhelming" "evidence of inefficiency." In part, it reasoned: ...
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