By Patrick Maloney and Sam Fogas, The Maloney Firm, APC
In October 2019, the California Court of Appeal provided guidance concerning the scrutiny that the trial courts are to apply when reviewing requests for attorneys’ fees. In Morris v. Hyundai Motor America, Mary Morris (“Morris”) appealed the trial court’s decision to reduce the award of attorneys’ fees from what Morris requested to what the trial court decided was reasonable. The Court of Appeal held:
1. A trial court can reduce attorneys’ fees awarded based on a determination that a routine, non-complex case was “overstaffed to a degree that significant inefficiencies and inflated fees resulted”; and
2. A trial court can reduce attorneys’ billable rates if the court finds that the rates were unreasonable given the complexity and length of the case.”
In March 2016, Morris sued Hyundai Motor America (“Hyundai”) in part under the Song-Beverly Consumer Warranty Act (“Song-Beverly Act”) for failing to conform a vehicle to its warranties. The parties ultimately settled the claim for $85,000.00 plus “reasonable attorney fees and expenses to be determined by the court in the absence of an agreement by the parties.” Morris sought $127,792.50 in fees based on work performed by eleven attorneys from two law firms, and one paralegal. Morris further sought a lodestar multiplier of 1.5 as additional compensation because Morris’s attorney had taken the case on contingency and payment had been delayed. Morris’s total attorneys’ fees sought totaled to $191,688.75.
The trial court rejected Morris’s requested fee award, finding that “[f]or a case that did not present particularly complex or unique issues, which did not require any discovery motions, and which did not go to trial . . . a reasonable number of attorneys is one partner and at most two associates/paralegals.” The trial court further found that the hourly rates for each attorney was not reasonable, and declined to apply the requested multiplier. The trial court awarded attorney fees of $73,864.00.
Morris appealed, arguing that the trial court engaged in inappropriate proportionality analysis and abused its discretion by cutting hours billed by six of the eleven attorneys and by reducing the attorneys’ hourly rates. Morris relied on the Song-Beverly Act, which bars a court from decreasing an award of attorneys’ fees to lower the proportion between the attorney fees award and the settlement/damages amount.
The Court of Appeal Upholds the Trial Court’s Reduction of Attorneys’ Fees
Acknowledging the Song-Beverly Act, the Court of Appeal held that a trial court is free to reduce an award for attorneys’ fees where “it was unreasonable to have so many lawyers staffing a case that did not present complex or unique issues, did not involve discovery motions, and did not go to trial.”
In sweeping aside Morris’s arguments that the trial court abused its discretion, the Court of Appeal held, “Plainly, it is appropriate for a trial court to reduce a fee award based on its reasonable determination that a routine, non-complex case was overstaffed to a degree that significant inefficiencies and inflated fees resulted.”
Finally, the Court of Appeal set forth a number of factors that the trial court did and could consider when determining if an award of attorneys’ fees is reasonable – including the trial court judge’s own experience and opinion. Those factors include: “finding that the matter was not complex; that [the matter] did not go to trial ; that the name partners were doing work that could have been done by lower-billing attorneys; and that all the attorneys were doing work that could have been done by paralegals.”
Hindsight Is 20/20, But Foresight May Save You Time and Money When It Comes to Recovering Attorneys’ Fees
While Morris involved recovery of attorneys’ fees under the Song-Beverly Act, the Court of Appeal’s reasoning is not limited to actions based on that statute. Absent obvious bias or error, a trial court’s fee award is likely to be upheld. As such, even where recovery of reasonable attorneys’ fees is mandated by contract or statute, attorneys should guard against inefficiency, redundancy, and overbilling to avoid the risk of not recovering their time and resources.
About the Authors: Patrick Maloney and Sam Fogas
The founding shareholder of The Maloney Firm, APC, Mr. Maloney represents attorneys and clients in disputes over legal fees and legal malpractice. Mr. Fogas is a post-bar law clerk at The Maloney Firm. The authors may be reached at firstname.lastname@example.org and email@example.com.