KURT BROADHAG VS BMW OF NORTH AMERICA LLC

Tentative Rulings

Case Number: BC677890    Hearing Date: March 10, 2020    Dept: 20

Tentative Ruling

Judge David J. Cowan

Department 20

Hearing Date:  Wednesday, March 11, 2020

Case Name: Kurt Broadhag v. BMW NA

Case No.: BC677890

Motion: Attorney’s Fees

Moving Party: Plaintiff Kurt Broadhag

Responding Party: Defendant BMW of North America, LLC

Notice: OK   

Ruling: The Motion for Attorney’s Fees is CONTINUED. The continuance date will be determined at the hearing after discussing an appropriate briefing timeline.

The Court requests supplemental briefing and/or evidence on: (1) the prevailing rates for noncontingent representation in lemon law litigation; (2) the impact of Ketchum v. Moses and Robertson v. Fleetwood Travel Trailers of California, Inc. on the Court’s ability to consider fees awarded in contingency cases when determining a base lodestar; and (3) the effect of the Court’s order taxing costs on Broadhag’s request for costs.

Moving party to give notice.

BACKGROUND

On November 20, 2019, Defendant BMW of North America, LLC (“BMW”) served a CCP section 998 settlement offer to Plaintiff Kurt Broadhag (“Broadhag”).

On November 25, 2019, Broadhag accepted the 998 offer.

On December 16, 2019, Broadhag filed a memorandum of costs seeking $14,821.56 in costs and expenses.

On December 31, 2019, BMW filed a Motion to Tax Costs challenging the memorandum.

On January 31, 2020, Plaintiff Kurt Broadhag (“Broadhag”) filed a Motion for Attorney’s Fees, Costs, and Expenses with supporting declarations and evidence.

On February 10, 2020, the Court granted in part BMW’s Motion to Tax Costs, holding that Broadhag’s “recoverable costs are now reduced from $14,821.56 to $7,751.17.”

On February 21, 2020, BMW filed an Opposition and supporting declaration, as well as objections to the declarations supporting Broadhag’s motion.

On March 3, 2020, Broadhag filed a Reply and supplemental declaration, as well as objections to BMW’s supporting declarations and responses to BMW’s objections.

DISCUSSION

The base lodestar figure in an action taken on contingency must be “based on the reasonable hours spent, multiplied by the hourly prevailing rate for private attorneys in the community conducting noncontingent litigation of the same type.” (Ketchum v. Moses (2005) 24 Cal.4th 1122, 1133; Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 819 (“the initial lodestar amount is based on the reasonable rate for noncontingent litigation of the same type”) (emphasis original)) Here, SLP exclusively relies on cases where it litigated on a contingency basis. (See, e.g., Shepard v. BMW (LASC No. BC622506) at 5:11 (“Shepard’s case was taken on a contingency basis”); Zomorodian v. BMW of NA, LLC (C.D. Cal. July 23, 2019) No. CV175061DMGPLAX, 2019 WL 6534513 at *5 (“The Court acknowledges the contingent nature of this case”); Forouzan v. BMW of NA, LLC (C.D. Cal. Jan. 11, 2019) No CV 17-3875-DMG (GJSx) at *11 (“The Court acknowledges the contingent nature of this case”), Joshua Holeman v. FCA (United States District Court for the Central District of California Case No. 2:17-cv-08273-SVW-SK) at *1 (“Plaintiffs’ counsel engaged in a contingency fee representation of Plaintiffs in this action”); Fuller v. FCA US, LLC (LASC No. BC556964) at *2 (“Plaintiff’s counsel took this case on a contingent basis”))

None of these cases bear directly on the “prevailing rate for private attorneys . . . conducting noncontingent litigation.” (Ketchum, supra, 24 Cal.4th at 1133) The fact that other trial courts approved hourly rates in certain cases is at best circumstantial evidence of the prevailing rates in this area. It appears that, under Ketchum and Robertson, it would be improper for the Court to determine an initial lodestar amount without evidence of noncontingent rates in the community.

The Court does not even have evidence of defense counsel’s hourly rates, which would at least provide context for the value of noncontingent representation in this area. As a result, the Court cannot reach SLP’s request for a fee enhancement either, because the purpose of an enhancement is to account for the additional risk of taking a case on contingency. The Court cannot assess the risk SLP incurred without knowing the prevailing noncontingent rate.

The Court also notes Broadhag’s request for $14,821.56 in costs and expenses. The Court previously granted BMW’s Motion to Tax Costs and reduced recoverable costs from $14,821.56 to $7,761.17. It is unclear why Broadhag is now requesting the untaxed value. BMW raised this issue in its Opposition, but Broadhag did not address it. The Court requests input from Broadhag on whether its request for costs and expenses should still be considered.

Accordingly, the Motion for Attorney’s Fees is CONTINUED. The continuance date will be determined at the hearing after discussing an appropriate briefing timeline.

The Court requests supplemental briefing and evidence on the prevailing rates for noncontingent representation in lemon law litigation, the impact of Ketchum and Robertson on the Court’s ability to consider fees awarded in contingency cases when determining a base lodestar, and the effect of the Court’s order taxing costs on Broadhag’s request for costs here.

Moving party to give notice.

Case Number: BC677890    Hearing Date: February 10, 2020    Dept: 20

Tentative Ruling

Judge David J. Cowan

Department 20

Hearing Date: Monday, February 10, 2020

Case Name: Kurt Broadhag v. BMW of North America, LLC et al.

Case No.: BC677890

Motion: Tax Costs

Moving Party: Defendant BMW of North America, LLC

Responding Party: Plaintiff Kurt Broadhag

Notice: OK

Ruling: Defendant BMW’s Motion to Tax Costs is GRANTED IN PART.

Plaintiff Broadhag’s costs will be taxed by $7,070.39. Broadhag’s recoverable costs are now reduced from $14,821.56 to $7,751.17.

Moving party to give notice.

BACKGROUND

On August 15, 2017, Plaintiff Kurt Broadhag (“Broadhag”) filed the Complaint against Defendant BMW of North America, LLC (“BMW), and Does 1 to 10 for violations of CCP §§ 1791.1, 1791.2, and 1793.2, as well as a cause of action for fraud. On November 20, 2019, after two years of litigation but before trial, BMW made a CCP § 998 offer of $93,960.00, which Broadhag accepted on November 25, 2019. On December 2, 2019, the Court entered judgment for Broadhag against BMW pursuant to the 998 offer. On December 16, 2019, Broadhag submitted a memorandum of costs. On December 31, 2019, BMW filed its Motion to Tax Costs.

ANALYSIS

“If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary.” (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774) Generally, an item “appear[s] to be proper” if it is expressly authorized by statute. If the items are not expressly authorized by statute and are properly objected to, “they are put in issue and the burden of proof is on the party claiming them as costs.” (Id.; Foothill-De Anza Community College Dist. v. Emerich (2007) 158 Cal.App.4th 11, 29)

Court Reporter Fees and Fees for Reporters’ Transcripts

Broadhag seeks $2,453.00 in costs for court reporter fees and transcript fees, $903.00 of which were fees for transcripts of hearings. BMW argues all these costs must be taxed for two reasons. First, costs for obtaining transcripts of court proceedings are not recoverable absent a court order. (CCP § 1033.5(b)(5)) Here, the Court did not order any transcripts (though it did issue orders appointing court reporters pro tempore). Second, BMW argues that Broadhag has not established the remaining court reporter fees were “necessary and proper,” and notes that Broadhag failed to indicate the relevant hearing dates.

Broadhag argues that expenses for unordered transcripts are recoverable as expenses under Civil Code § 1794(d). (Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 42-43) However, Warren involved a plaintiff who ordered trial transcripts in order to defend the jury’s award against subsequent challenges. The Warren court found these expenses were “reasonably incurred” because the plaintiff would have incurred great expense and hardship trying to defend the award without the transcripts. Thus, Warren does not provide parties carte blanche to order any transcript and recover the expenses for it; the requesting party must demonstrate that the expenses were reasonably incurred. Broadhag has not made such a showing, incorrectly arguing that unordered transcripts are inherently recoverable under § 1794(d). Thus, Broadhag’s costs are taxed in the amount of $903.00 for unordered and unnecessary transcripts.

BMW incorrectly claims Broadhag has the burden of showing the incurred court reporter fees were “necessary and proper.” Court reporter fees are expressly allowed by CCP sec. 1033.5(a)(11). Therefore, the burden is on the objecting party, BMW, to show the fees are unreasonable. (Ladas, supra, at 774) BMW asserts, without any argument, that the fees were not reasonably necessary and were unreasonable in amount. This bare assertion is insufficient to carry its burden. In its Reply, BMW argues the requested court reporter fees improperly included parking, processing, and handling charges, but requests taxation of the entirety of the court reporter fees without separating out the allegedly improper charges. Moreover, BMW fails to cite any authority that these charges cannot be included in recovery for court reporter fees. Thus, BMW’s request for taxation of court reporter fees is denied.

Deposition Costs

Broadhag seeks $3,219.85 in deposition costs. BMW initially argued all these costs must be taxed because the Court has insufficient information to determine whether these costs were necessary or allowable under CCP § 1033.5. Specifically, BMW claimed Broadhag had not indicated which costs pertained to “taking,” “transcribing,” “travel,” and “videotaping” of depositions, rendering the costs “ambiguous.” In its Reply, BMW cedes ground in light of invoices produced by Broadhag, reducing its taxing request to only $106, comprised of $36 in parking expenses and $70 in “shipping and handling costs.”

These objections to parking expenses and shipping and handling costs were not raised in BMW’s Motion to Tax Costs, and Broadhag has had no opportunity to respond. The burden to show reasonableness only shifts to the party seeking costs once the requested costs are properly objected to; Broadhag’s delayed objection to these specific expenses does not shift the burden. (Ladas, supra, at 774) Moreover, BMW fails to argue that these costs are unnecessary and does not cite any authority for its claim that these expenses are unrecoverable. Accordingly, BMW’s request for taxing of deposition costs is denied.

Other Costs

Broadhag seeks $8,442.06 in “other costs,” including delivery expenses, travel expenses, filing costs, and ADR referee costs. BMW requests these costs be taxed by $7,583.46. As each category of fees is argued separately by the parties, the Court will analyze each category separately.

Delivery Expenses

BMW argues that “shipping, delivery, messenger service and postage costs” are not recoverable under CCP § 1033.5(b)(3) and requests costs be taxed accordingly by $1,591.79. If delivery and messenger expenses are “reasonably necessary” for litigation, such fees are recoverable under CCP § 1033.5(c)(4). (Ladas, supra, 19 Cal.App.4th at 776; Foothill, supra, at 30) However, Broadhag incorrectly claims the burden is on BMW to establish these fees are excessive; in fact, if the costs are “not expressly allowed by the statute, the burden is on the party claiming the costs to show that the charges were reasonable and necessary.” (Id. at 29; Nelson v. Anderson (1999) 72 Cal.App.4th 111, 132) CCP § 1033.5(c)(4) is a discretionary provision that does not “expressly allow” any specific costs. Thus, Broadhag bears the burden of establishing the messenger fees were reasonably necessary.

In his Opposition, Broadhag has not shown any justification for the additional expense of courier services and/or overnight delivery instead of ordinary measures such as mail, FedEx, or personal filing. (See Nelson, supra, at 132) Instead, Broadhag merely asserts these expenses were “reasonably incurred to effectuate proper service of documents.” Documents can be properly served by less expensive means, especially in a case that did not go to trial. (See Ladas, supra, at 776 (finding courier and messenger charges justified by attorney’s declaration that charges were incurred for trial preparation)) The declaration accompanying Broadhag’s Opposition fails to address these charges. Accordingly, there is no evidence that these charges were “reasonably necessary.”

Broadhag’s reliance on Petropolous v. FCA US LLC (S.D Cal. 2019) 2019 WL 2289399 is misplaced. The Petropolous court reversed the clerk’s order taxing overnight courier costs because the clerk’s order misapplied Erie doctrine by following federal law instead of California law; the court then found the defendant had not shown the costs were unreasonable. (Id. at 4) The Petropolous court did not decide the issue of whether overnight courier costs are recoverable under 1794, finding only that the defendant failed to meet its burden. (Id.) Moreover, Petropolous is merely persuasive authority, as it is a federal district court opinion that is not binding on this court. Petropolous also appears to be an unpublished case—citation and reliance are therefore improper. Accordingly, Broadhag’s costs are taxed in the amount of $1,591.79.

Travel Costs

BMW argues that routine travel costs are not recoverable under CCP § 1033.5(b)(2) and requests costs be taxed accordingly by $275.60 to deny costs for traveling to hearings. “The only travel expenses authorized by CCP § 1033.5 are those to attend depositions.” (Ladas, supra, 19 Cal.App.4th at 775) “Routine expenses for local travel by attorneys are not reasonably necessary to the conduct of litigation.” (Id. at 775)

Broadhag argues that his travel costs are recoverable under CCP § 1033.5 and argues that his travel costs are recoverable under Civil Code § 1794, which authorizes broader recovery of “costs and expenses.” Nonetheless, Broadhag has not established that non-deposition travel costs are recoverable here—none of the cases cited by Broadhag found travel expenses recoverable under Civil Code § 1794. (See, e.g., Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 138 (finding “filing fees, expert witness fees, marshall’s fees, etc.” are expenses under section 1794); Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 42-43 (finding trial transcript fees were “reasonably incurred” expenses); Zomorodian v. BMW of North America, LLC (C.D. Cal. 2019) 332 F.R.D. 303, 305 (finding expedited deposition transcript expenses expert witness fees recoverable as expenses under section 1794)) Additionally, Broadhag incorrectly relies on Thon v. Thompson (1994) 29 Cal.App.4th 1546 in arguing CCP § 1033.5 authorizes his travel expenses. Thon found only that the moving party could recover travel expenses incurred to attend a deposition from out of state. (Id. at 1548-49) Thus, Broadhag has failed to meet his burden of establishing a right to recover travel costs to attend hearings. Costs are taxed accordingly in the amount of $275.60.

Filing Fees

BMW argues Broadhag’s requested filing fees for “routine filings” are exorbitant and unreasonable, and therefore not recoverable under CCP § 1033.5(c)(3). Accordingly, BMW requests costs be taxed by $1405.57. Filing fees are expressly recoverable under CCP § 1033.5(a)(1), though the Court has discretion to deny unnecessary costs under CCP § 1033.5(c)(2). If certain expenses are expressly allowed by statute, the burden is on the objecting party to establish that those expenses are unreasonable. (Foothill, supra, at 29) BMW asserts, without explanation, that the recovered costs are “exorbitant.” This is insufficient to carry its burden. In its Reply, BMW argues that expedited delivery fees are inherently unnecessary for routine filings, but cites no authority for this broad position, and does not address Broadhag’s broader ability to recover expenses under Civil Code § 1794. Accordingly, BMW’s request for taxing of Broadhag’s filing fees is denied.

ADR Referee Costs

BMW argues Broadhag’s requested $4,300.00 in expenses for an ADR referee must be taxed in full, citing a court order providing that ADR referee expenses would be split evenly among the parties. Broadhag’s Opposition fails to address the court order, arguing the fees were reasonable and recoverable under Civil Code § 1794(d). Instead, Broadhag relies upon Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, where the Court of Appeal found the trial court “abused its discretion in disallowing a total of $57,587 in attorney fees incurred in connection with the proceedings before the discovery referee.” (Id. at 1001) However, the Court reversed because the trial court incorrectly found that the discovery referee had already awarded $15,000 in attorney’s fees. The Court of Appeal reversed because of this factually incorrect finding. (Id.) Here, there is no such erroneous finding, and there is a court order specifically providing that “[a]ll parties shall pay equal shares of the referee’s fees.” Even absent this order, Broadhag fails to cite any authority finding discovery referee expenses are recoverable under Civil Code § 1794(d). Accordingly, Broadhag’s costs are taxed by $4,300.00.

998 Offer Costs

BMW argues that any costs incurred after November 25, 2019 must be taxed because of Broadhag’s acceptance of an offer under CCP § 998, citing Timed Out LLC v. 13359 Corp. (2018) 21 Cal.App.5th 933. However, CCP § 998 only restricts fee recovery when the 998 offer is rejected and the rejecting party fails to obtain a more favorable judgment or award. Here, Broadhag accepted the 998 offer. Timed Out LLC is not on point here; that case involved a plaintiff who rejected the defendant’s 998 offer and moved for postoffer costs, which triggered the prohibition against recovery in CCP § 998(c)(1). (Id. at 938, 945-46) Therefore, BMW’s request for taxing of postoffer costs is denied.    

CONCLUSION

For the foregoing reasons, Plaintiff BMW’s Motion to Tax Costs is GRANTED IN PART. Defendant Broadhag’s costs will be taxed by $7,070.39. Broadhag’s recoverable costs are now reduced from $14,821.56 to $7,751.17. Moving party to give notice.