Size Of The Reduction Obviously Bothered Appellate Court, Although Its Statements On Level Of Detail Of State Court Fee Award Seems To Point Toward Adoption Of More Detailed Federal Court Analysis.
McCullough v. FCA US, LLC, Case No. D073330 (4th Dist., Div. 1 Nov. 9, 2018) (unpublished) is an interesting “lemon law” case where the trial judge eventually reduced a Song-Beverly Act fee request by 78% but did award prejudgment interest which resulted in the necessity for a “re-do” based on a prior 998 offer. But the appellate court also suggested that the reduction was too steep and that a better explanation of the fee recovery was necessitated even though a statement of decision is not required in California – this has the seeds for a more stringent explanation of a fees award in state court proceedings, as is the standard in federal courts.
What happened here is that plaintiff car owner rejected a $24,000 CCP § 998, plus reasonable expenses/fees/costs, in a lemon law case, going to trial by which plaintiff won $17,163.83. Plaintiff then moved to recover $125,055 in pro-car owner, Song-Beverly Act fees ($83,370 lodestar plus a 1.5 multiplier). The lower court was appalled at this request and only awarded $18,685 fees—a 78% reduction after finding the case was over-lawyered and inefficiently run. Later, the trial judge did determine plaintiff was entitled to $10,791.20 in prejudgment interest although denying post-offer fees to plaintiff after determining that he did not “beat” the 998 offer.
The appellate reversed the fee award and remanded upon plaintiff’s challenges. The first one was the easiest—when one adds the compensatory award with the prejudgment interest, the 998 offer was exceeded such that plaintiff was entitled to recapture post-offer fees.
However, just as salient, the appellate court did opine on the lower court’s reasoning in reaching the 78% reduction. It was worried about the size of the reduction given that the Song-Beverly Act is crafted to be compensatory in nature as far as fee awards. Simply because the compensatory award was low in relation to the fee request made no difference, because proportionality is not at issue under the fee-shifting statute. The reviewing court also criticized the trial judge for not providing any examples of inefficiency and duplicative effort such that the fee award was not precise enough. This last determination is interesting because California law does not require a statement of decision in a fee proceeding such that there is a strong insinuation by the panel in wanting to see more a detailed explanation in line with the one required in the federal court system. Although admitting that lower courts do not have to be meticulous accountants when adjudging fees motions, it did conclude that “[t]he reviewing court should be able to determine how the court ultimately arrived at the amount of fees it awarded, particularly where it orders a substantial reduction in the actual time expended.” (Slip Op., p. 22.)