Mikhaeilpoor v. BMW of N. Am., LLC

• Citation: 48 Cal.App.5th 240,261 Cal.Rptr.3d 679
• Decision Date: 01 April 2020
• Docket Number: B293987
• Court: California Court of Appeals Court of Appeals
• Parties: Lorik MIKHAEILPOOR, Plaintiff and Appellant, v. BMW OF NORTH AMERICA, LLC, et al., Defendants and Respondents.

48 Cal.App.5th 240

261 Cal.Rptr.3d 679

Lorik MIKHAEILPOOR, Plaintiff and Appellant,

v.BMW OF NORTH AMERICA, LLC, et al., Defendants and Respondents.

B293987

Court of Appeal, Second District, Division 1, California.

Filed April 1, 2020

Rosner, Barry & Babbitt, Hallen D. Rosner and Arlyn L. Escalante, San Diego, for Plaintiff and Appellant.

Morgan, Lewis & Bockius, Thomas M. Peterson, San Francisco, and Mark W. Allen for Defendants and Respondents.

WHITE, J.^*

Lorik Mikhaeilpoor (Mikhaeilpoor) appeals from the trial court’s order awarding her attorney fees following the trial of her action against BMW of North America LLC and Finchey Corporation of California (collectively, BMW) under the Song–Beverly Consumer Warranty Act (the Song-Beverly Act). ( Civ. Code, § 1790 et seq. )¹ Mikhaeilpoor sued BMW after she purchased a defective 2013 BMW 328i that BMW was unable to repair.

FACTUAL AND PROCEDURAL SUMMARY

A. Mikhaeilpoor’s Complaint

On February 22, 2016, Mikhaeilpoor sued BMW and Finchey Corporation of California (erroneously named in the complaint as Pacific BMW), an auto dealership, asserting causes of action under the Song-Beverly Act stemming from her September 13, 2014 lease of the 2013 BMW 328i for which BMW had issued a warranty. Mikhaeilpoor alleged that defendants: (1) failed to promptly replace her car or make restitution, in violation of section 1793.2, subdivisions (a)(2) and (d)(1); (2) failed to commence repairs aimed at conforming the car to its warranty, in violation of section 1793.2, subdivision (b); (3) failed to make available service and repair facilities (including parts and literature) sufficient to effectuate repairs, in violation of section 1793.2, subdivision (a)(3); (4) breached the express warranty, as defined in section 1791.2, subdivision (a); and (5) breached the implied warranty of merchantability, as defined in section 1791.1. Plaintiff’s complaint sought restitution, an award of actual damages, a civil penalty of two times actual damages and attorney fees and costs.

B. The Trial

The trial commenced on February 21, 2018, and spanned six days. On February 28, 2018, the jury returned a special verdict in favor of Mikhaeilpoor. The jury awarded $35,805.08, comprised of $17,902.54 in compensatory damages and $17,902.54 in civil penalties.

C. Mikhaeilpoor’s Motion for Attorney Fees

On June 8, 2018, Mikhaeilpoor filed a motion for attorney fees pursuant to section 1794, subdivision (d), seeking $344,639. This figure consisted of $226,426, plus a 0.5 multiplier enhancement (totaling $113,213), and $5,000 for addressing the attorney fee resolution process.

The fee motion was accompanied by declarations from Payam Shahian, the managing attorney for Mikhaeilpoor’s trial counsel, and Christine Haw, lead trial counsel. Shahian’s declaration contained a bevy of information about his credentials and experience in unrelated Song-Beverly Act cases where his clients were awarded fees. Shahian’s declaration also included 18 exhibits comprised of minute orders and notices of rulings on fee motions in unrelated cases; this despite the fact that no fees were billed for services by Shahian. Shahian’s declaration also identified 10 attorneys who worked on this case along with their proffered billing information: Gregory Yu ($495 per hour), Jacob Cutler ($385 per hour in 2016, $395 per hour in 2017, and $410 per hour in 2018), Benjamin Beck ($400 per hour), Christine Haw ($365 per hour in 2017 and $375 per hour in 2018), Eleazar Kim ($350 per hour in 2017 and $370 hour in 2018), Yoon Kim (former attorney) ($365 per hour), Michael Robinson (former attorney) ($595 per hour), Heather Rodriguez (former attorney) ($325 per hour), Carey Wood ($370 per hour in 2017 and $375 per hour in 2018), Armig Khodanian (former attorney) ($325 per hour). Shahian’s declaration also attached a copy of the billing records for Mikhaeilpoor’s trial counsel.

The fee motion was opposed because: the billing records vastly overstated the work performed; the hourly rates were excessive; and an 0.5 multiplier adjustment was unwarranted. The defense argued that fees should be reduced by at least $83,206.05, and the proffered hourly billing rates of $325 to $595 were not based on market value.

Mikhaeilpoor replied, defending the amounts claimed. Before hearing the motion, the trial court issued a tentative ruling awarding $94,864 in attorney fees: $95,900 less an offsetting amount owed to defendants.

The court heard the motion on July 31, 2018. During argument, Judge Hammock explained that he "went through all the bills" and was "aghast" that counsel sought $343,000 in fees. He "saw the motions, the discovery motion," and "the motion for terminating sanctions, which was much ado about nothing." He found before him "a very simple case, straightforward trial," and "not a complicated case."

In assessing fees, the court "looked at all the bills" and then "calculated what [it] thought was reasonable." The court understood that it had the "ability to exercise [its] sound discretion," but could not "do it arbitrarily." The court emphasized that its analysis was not based on limiting plaintiff’s fees to a proportion of the trial recovery; the court "recognize[d] that even though [the recovery] was [$]17,000, doubled to 34, this could justify a large attorney fee award." Also, the court did not take into account whether plaintiff should have accepted a Code of Civil Procedure section 998 offer.

The court found the requested fee amount "was just not reasonable." The court "went through the bill and [it] decided what [it] felt was a reasonable amount of hours for a reasonably experienced attorney, in similar circumstances, to do the tasks that [plaintiff’s trial counsel] claim to have done.... [I]t added up to 225 hours." The court decided that $350 "is a reasonable hourly rate for the services that were done."

During argument, plaintiff’s counsel made two main arguments. First, counsel argued the court could not reduce plaintiff’s requested fee amount by more than the $83,206.05 reduction because that would constitute entertaining "objections not raised by [defendants]." Second, counsel argued that defendants had the burden to prove grounds for a fee reduction. The court took the matter under submission in order to review the billing records again. Ultimately, the court found that $95,900 was the reasonable amount of attorney fees for work performed on behalf of Mikhaeilpoor. After offsetting certain fees and costs that had been awarded to defendants, the net amount of awarded fees totaled $94,864.

STANDARD OF REVIEW

An award of attorney fees under the Song-Beverly Act is reviewed for abuse of discretion. ( Goglin v. BMW of North America, LLC (2016) 4 Cal.App.5th 462, 470, 208 Cal.Rptr.3d 646 ( Goglin ).) The reviewing court presumes that the trial court’s award is correct and infers that a request for fees is inflated when the trial court substantially reduces the requested amount. ( Etcheson v. FCA US LLC (2018) 30 Cal.App.5th 831, 840, 242 Cal.Rptr.3d 35.) These rules apply because the experienced trial judge is best positioned to evaluate the professional services rendered in his or her courtroom. ( Ibid ., citing Goglin , supra , 4 Cal.App.5th at pp. 470–471, 208 Cal.Rptr.3d 646.) The trial court’s decision must not be disturbed " ‘unless [the Court of Appeal is] convinced that it is clearly wrong, meaning that it is an abuse of discretion.’ " ( Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 148, 50 Cal.Rptr.3d 273 ( Graciano ), citing In re Vitamin Cases (2003) 110 Cal.App.4th 1041, 1052, 2 Cal.Rptr.3d 358.) Accordingly, this court’s review of an order awarding attorney fees "must be highly deferential to the views of the trial court." ( Nichols v. City of Taft (2007) 155 Cal.App.4th 1233, 1239, 66 Cal.Rptr.3d 680.) " ‘The only proper basis of reversal of the amount of an attorney fees award is if the amount awarded is so large or small that it shocks the conscience and suggests that passion or prejudice influenced the determination.’ " ( In re Tobacco Cases I (2013) 216 Cal.App.4th 570, 587, 156 Cal.Rptr.3d 755.)

In particular, "the lodestar method vests the trial court with the discretion to decide which of the hours expended by the attorneys were ‘reasonably spent’ on the litigation" ( Meister v. Regents of University of California (1998) 67 Cal.App.4th 437, 449, 78 Cal.Rptr.2d 913 ( Meister )), and to determine the hourly rates that should be used in the lodestar calculus. ( 569 E. County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 436–437, 212 Cal.Rptr.3d 304.) The methodology embodied in this language is consistent with California’s lodestar adjustment method of calculating attorney fees. (See Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 818, 50 Cal.Rptr.3d 731 ( Robertson ).) As the plain wording of section 1794, subdivision (d) makes clear, the trial court is "to base the fee award upon actual time expended on the case, as long as such fees are reasonably incurred— both from the standpoint of time spent and the amount charged." ( Robertson , supra , at p. 817, 50 Cal.Rptr.3d 731.) In the case of contingency fee arrangements, "a prevailing buyer ... is entitled to an award of reasonable attorney fees for time reasonably expended by his or her attorneys ." ( Nightingale v. Hyundai Motor America (1994) 31 Cal.App.4th 99, 105, fn. 6, 37 Cal.Rptr.2d 149 ( Nightingale ), italics added.)

Under the lodestar adjustment methodology, the trial court must initially determine the actual time expended and then "ascertain 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 , supra , 31 Cal.App.4th at p. 104, 37 Cal.Rptr.2d 149.) Factors to be considered include, but are not limited to, the complexity of the case and procedural demands, the...