First District, Division 1 Holds that Civil Code section 1788.30(c) Language Does Not Preclude Use of Multipliers.
Civil Code section 1788.30(c), part of the Robbins-Rosenthal Fair Debt Collection Practices Act, allows a prevailing debtor enforcing any liability under the Act to recover “reasonable attorney’s fees, which shall be based on time necessarily expended to enforce the liability . . . .” Does this language allow for enhancement through use of a multiplier in the right case? Answer: You know already from the headline—yes it does.
Komarova v. National Credit Acceptance, Inc., Case Nos. A121316 & A122041 (1st Dist., Div. 1 June 25, 2009) (certified for publication) so held. There, under some egregious circumstances involving mistaken identity theft, plaintiff was awarded $197,905 in compensatory damages under the Act and $67,905 compensatory damages for intentional emotional distress. The jury also awarded her punitive damages of $75,000, all because a collection agency refused to believe that plaintiff (who spells her first name Anastasiya) was not Anastasia Komarova (no “y” in the first name). Later, plaintiff moved to recover a fee award of $378,375 under the Act (a $252,250 lodestar increased by a 1.5 multiplier). After the defense claimed that “at most $60,000” was reasonable, the trial court reduced the lodestar by 35%–to $163,962 (apportioning out work on the emotional distress and other non-fee type of work)—and multiplied by 1.25, resulting in a award of $204,953. After adding more time for posttrial work (with no multiplier), the grand total fee award clocked in at $230,740.50. Defendant appealed.
Arithmetica instructs an algorist (left) and an abacist (right). Wikipedia.
The First District, Division 1, in a 3-0 opinion authored by Presiding Justice Marchiano, determined that a multiplier was appropriately applied under the Act, as long as the Serrano v. Priest, 20 Cal.3d 25 (1977) (Serrano III) factors were satisfied. The “time necessarily expended” language in section 1788.30(c) did not militate in favor of a different result, because that language refers to the lodestar rather than the multiplier. Also, the Act was passed before Serrano III was decided, with that decision trumping any cryptic language to the contrary.
However, the appellate panel did reverse and remand, finding that the lower court placed undue emphasis on the “burden of private enforcement” factor—conflating private attorney general statute constructs with general multiplier principles. A remand was necessary to determine if the other factors, indeed, supported a multiplier.
BLOG BONUS COVERAGE—The Court of Appeal also decided that the Civil Code section 47 litigation privilege did not shield the germane conduct involved in this case under either the Fair Debt Collection Practices Act or the emotional distress claims.