Opinion
C087422
01-21-2020
CHARLES D. SMART et al., Plaintiffs and Appellants, v. FORD MOTOR COMPANY, Defendant and Respondent.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 159509)
Plaintiffs and appellants Charles D. Smart and Connie L. Smart appeal from an order awarding attorney fees under subdivision (d) of Civil Code section 1794 of the Song-Beverly Consumer Warranty Act (Song-Beverly Act), California's lemon law. Plaintiffs assert that the trial court improperly reduced their attorney fees by 40.4 percent based on the trial court's determination that this portion of the fees were incurred for plaintiffs' fraud causes of action, for which attorney fees cannot be recovered. We agree the trial court erred.
Plaintiffs accepted an offer to compromise under Code of Civil Procedure section 998 from defendant and respondent Ford Motor Company (Ford). The offer stated that Ford would pay plaintiffs "$247,500.00, which constitutes payment of the paid or payable amount of $55,083.09" for their Ford truck and "$192,416.91 in incidental and consequential damages and a two-time civil penalty under the Song-Beverly Act." Ford argued that plaintiffs' recovery under the Song-Beverly Act would exceed $247,500 by 40.4 percent, therefore 40.4 percent of plaintiffs' attorney fees were incurred in pursuing plaintiffs' fraud claims. The court adopted Ford's position.
The language of Ford's Code of Civil Procedure section 998 offer does not support the reduction. The offer does not allocate any portion of the payment to any cause of action except plaintiffs' Song-Beverly Act claim. All the items referred to as making up the total payment—reimbursement of the purchase price of the vehicle, incidental and consequential damages, and a civil penalty of two times actual damages—are recoverable under the Song-Beverly Act. (Civ. Code, §§ 1793.2, subd. (d)(2)(B), 1794, subds. (b), (c).)
Unless otherwise designated, all statutory references are to the Civil Code.
Plaintiffs also contend that the trial court erred in reducing the hourly rate their attorneys charged to "$350 for a partner, and $225 for an associate/contract attorney." We disagree the court erred in making this reduction. The trial judge had discretion to determine the amount of the hourly rate charged in the community for this type of legal representation and to reduce plaintiffs' attorneys' hourly rate accordingly.
The order awarding attorney fees is reversed and this case is remanded to the trial court to enter an order consistent with this opinion.
BACKGROUND
Plaintiffs allege that in 2006 they bought a new Ford F-250 truck with a defective 6.0 liter diesel engine. In 2013 plaintiffs sued Ford alleging four fraud claims, a claim for violation of the Consumers Legal Remedies Act, section 1750 et seq. (CLRA), and a claim under the Song-Beverly Act, section 1790 et seq. On the Song-Beverly Act claim, plaintiffs sought "incidental, consequential, and general damages" and "attorney's fees, reasonably incurred in connection with the commencement and prosecution of this action." Plaintiffs also sought "a civil penalty of up to two times the amount of actual damages" based on the allegation that Ford "willfully failed to comply with [its] responsibilities under the Song-Beverly Act."
On June 1, 2016, the court granted Ford's motion for summary adjudication, dismissing two of the four fraud causes of action.
Beginning in 2013 Ford served plaintiffs with a number of Code of Civil Procedure section 998 offers. On June 14, 2017, plaintiffs accepted Ford's fifth offer.
Paragraph No. 1 of the offer stated that "Ford will pay Plaintiffs Charles D. Smart and Connie L. Smart ('Plaintiffs') $247,500.00, which constitutes payment of the paid or payable amount of $55,083.09 for Plaintiff's [sic] 2006 Ford F250 . . . ('Subject Vehicle'), and $192,416.91 in incidental and consequential damages and a two-time penalty under the Song-Beverly Act."
Paragraph No. 2 of Ford's Code of Civil Procedure section 998 offer addressed plaintiffs' claim for attorney fees under section 1794, subdivision (d), of the Song-Beverly Act: "Ford will additionally pay Plaintiff's [sic] attorneys' fees, expenses and costs in the amount of $5,000.00 or, should the $5,000 be refused, Ford is willing to allow the Court to determine, based on a noticed motion filed pursuant to Civil Code section 1794(d), the amount of attorneys' fees, expenses and costs reasonably incurred by Plaintiff's [sic] counsel in the commencement and prosecution of this action, as provided by Civil Code section 1794(d). In ruling on Plaintiff's [sic] fee motion, and except as otherwise provided in this paragraph, the fees, expenses and costs amount shall be calculated as if Plaintiff [sic] was found to have prevailed in an action under section 1794(d) as of the date of this statutory offer except that (1) Ford shall not be liable for a multiplier greater that 1.00, and (2) Plaintiff [sic] may recover for fees and costs reasonably and actually incurred in bringing such a fee/cost motion. Ford will pay the attorney's fees and cost amounts determined by the Court within 30 days' notice of the Court's ruling on same."
Paragraph No. 7 of the offer stated: "This Statutory Offer is inclusive of all damages, restitution, costs, attorneys' fees, expenses, penalties, pre-judgment interest, post-judgment interest, and any other sums or amounts or claims that have been asserted by Plaintiff [sic] in this action. If this Statutory Offer is accepted, Plaintiff [sic] shall not be entitled, except as specified in paragraphs 1 and 2, to seek damages, costs, attorneys' fees, expenses, penalties, pre-judgment interest, post-judgment interest, or any other sums or amounts or claims in this action."
Plaintiffs filed a motion for attorney fees, costs, and expenses. Plaintiffs sought $147,207.50 in attorney fees and $17,722.03 in costs and expenses. Plaintiffs described Ford's Code of Civil Procedure section 998 offer of $247,500 as "inclusive of a full statutory 'buy-back' of their defective vehicle, incidental and consequential damages, and a maximum two-time civil penalty under the Song-Beverly Act, with Ford having no liability for a multiplier greater than 1.0."
Plaintiffs sought fees based on hourly rates that varied from $225 to $450 per hour for associates and contract attorneys and for partners from $375 to $650 per hour. Plaintiffs supported the reasonableness of their hourly rates with a survey of rates charged by well-known consumer law attorneys, court orders approving plaintiffs' counsel's rates in other cases, and a national survey of hourly rates.
Ford opposed the motion, contending, inter alia, that only fees allocated to plaintiffs' Song-Beverly Act claim could be awarded. Ford asserted that "the Court can easily apportion the amount of the settlement between the Song-Beverly and fraud claims. The Song-Beverly Act limits damages to the refund of purchase price plus a civil penalty of twice that amount, less a mileage offset. Here, this results in maximum Song-Beverly damages of $147,493.48. So of the $247,500.00, settlement, 40.4% was recovered under the fraud causes of action. The Court can thus conclude that 40.4% of Plaintiffs' attorneys' efforts in this case were devoted to causes of action for which fees cannot be recovered. [¶] Accordingly, a minimum of $57,452.03 must be reduced from the requested fees." No further details of this calculation are set forth and the calculation is not supported by citation to a declaration or exhibit accompanying Ford's opposition.
Ford further argued that "the fraud and Song-Beverly causes of action are not so intertwined that the Court must avoid apportionment. The Song-Beverly claim is entirely based on Plaintiff's [sic] vehicle, whether it was repaired after a reasonable number of attempts, and whether any defects impaired Plaintiff's [sic] use, value, and safety of the vehicle. On the contrary, the fraud claims which survived Ford's MSJ do not concern any facts unique to the Plaintiffs at all. Rather, they concerned the entire 6.0L fleet and whether Ford concealed facts to all 6.0L consumers."
Ford also challenged plaintiffs' counsel's hourly rates as excessive, citing orders from other cases where the rates approved for the lead partners in the firms representing plaintiffs were no more than $400 or $450 per hour.
In reply, plaintiffs asserted that their attorney fees "need not be apportioned when incurred in representation for an issue common to both a cause of action for which fees are permitted and one for which they are not." The common issue plaintiffs identified was "bad intent." To recover civil penalties under the Song-Beverly Act, plaintiffs argued they "would have been required to introduce evidence of Ford's bad intent, the same type of issue required of Plaintiffs to show punitive damages under Plaintiffs' fraud cause of action."
Plaintiffs further argued that "hourly rates should be considered in the context of the rates charged by attorneys in the metropolitan community in which they practice and should not vary based on the case venue," citing Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 399 (Horsford).)
On March 8, 2018, the trial court issued a tentative ruling awarding $29,297.16 in attorney fees. The court's reduction of attorney fees was based on four factors: (1) the court's determination that a "reasonable hourly rate for this community is $350 for a partner, and $225 for an associate/contract attorney"; (2) a reduction of $952.50 for time spent on a petition for coordination with other cases involving Ford's 6.0L diesel engine, which the court found to be unreasonable; (3) a reduction "by 40.4%, which the Court determines is related to efforts in this case devoted to the fraud causes of action, for which fees cannot be recovered"; and (4) a reduction for fees incurred in court appearances which should have been accomplished by telephone rather than by incurring the travel expense of counsel's appearance.
Plaintiffs contested the tentative. There was no court reporter at the hearing, but the court and the parties agree that post-hearing the court ordered supplemental briefing " 'on the issue of Plaintiffs' ability to recover attorney's fees in this action under the Consumer Legal Remedies Act pursuant to Civil Code § 1780(e), and whether such recovery affects apportionment of fees.' "
In supplemental briefing, Ford argued that an award of attorney fees under the CLRA is mandatory unless there is an enforceable agreement to the contrary, which in this instance Ford maintained was its Code of Civil Procedure section 998 offer that plaintiffs accepted. Ford asserted that paragraph No. 2 of the Code of Civil Procedure section 998 offer only permitted plaintiffs to move for attorney fees under the Song-Beverly Act and paragraph No. 7 provided that plaintiffs were not entitled to attorney fees except as provided in paragraph No. 2. Ford also argued that there was insufficient evidence to support a different apportionment of fees than that set forth in the court's tentative because plaintiffs "did not submit any evidence indicating the amount of their incidental and consequential damages in this action" or provide sufficient discovery for Ford to determine this amount.
In their supplemental brief, plaintiffs noted that, "[a]s explained at the March 9, 2018 hearing, Plaintiffs' fee motion sought fees under the Song-Beverly Act because of how Ford characterized its settlement offer." Plaintiffs argued that (1) an award of attorney fees was mandatory under section 1780, subdivision (e), of the CLRA, (2) plaintiffs were the prevailing party on their CLRA claim, and (3) the court need not apportion fees between plaintiffs' fraud and CLRA claims, which shared the common issue of Ford's awareness and concealment of the defect in the subject engine.
In addition, plaintiffs contended that "apportionment is also not appropriate in general because Defendant's own 998 offer characterized the entire settlement as being pursuant to the Song-Beverly Act . . . . In Ford's opposition and at oral argument, Ford claimed that despite what its 998 offer said, only $147,500.00 was for Plaintiffs' Song-Beverly Act claim. While Plaintiffs acknowledge that total amount included amounts for punitive damages, a contract is construed against the drafter, and Ford should not be able to claim that its offer didn't 'actually' mean what it said when it happens to benefit Ford."
Lastly, plaintiffs argued that Ford's claim that the offer exceeded the maximum Song-Beverly Act recovery by 40.4 percent and must be apportioned by that percentage was flawed. Plaintiffs sought evidence Ford was aware of the defects in its engine that could not be resolved by repairs, which Ford knew were ineffectual. This evidence could be used to prove a willful violation of the Song-Beverly Act. Therefore all work performed by plaintiffs' attorneys was applicable to a claim under the statute, because all fees incurred on a common issue qualified for an award.
On April 19, 2018, the trial court issued a final ruling on plaintiffs' motion for attorney fees without further hearing. The court now awarded $46,631.78 in attorney fees. The ruling does not explain the reason for this increase from the amount of $29,297.16 in the tentative ruling. The final ruling reiterated that the bases for the reduction included the court's determination of reasonable hourly rates for the community, the time spent on the petition for coordination, and routine court appearances that should have been accomplished by telephone. The court also reiterated the reduction of fees by 40.4 percent for efforts devoted to plaintiffs' fraud causes of actions, and added that "the Court has determined that Plaintiffs' [sic] expressly waived their right to seek attorneys' fees under the Consumer Legal Remedies Act pursuant to the terms of the §998 offer."
Plaintiffs filed a timely appeal. (Code Civ. Proc., § 904.1, subd. (a)(2).)
DISCUSSION
Percentage Reduction of Attorney Fees
Plaintiffs contend and we conclude that the trial court misinterpreted Ford's Code of Civil Procedure section 998 offer to include a substantial amount in payment of plaintiffs' fraud claims. On that basis Ford argued that plaintiffs' attorney fees should be reduced by 40.4 percent and the court adopted Ford's position. However, our reading of the plain language of the Code of Civil Procedure section 998 offer is that the entire amount of $247,500 was expressly paid to plaintiffs for their Song-Beverly Act claim. Therefore, the trial court had no basis for a 40.4 percent reduction of plaintiffs' fees.
Generally, a trial court's decision on a Code of Civil Procedure section 998 offer is reviewed for abuse of discretion. But "where the issue is interpretation of a [Code of Civil Procedure] section 998 offer as to undisputed facts, our review is de novo." (Timed Out LLC v. 13359 Corp. (2018) 21 Cal.App.5th 933, 942 (Timed Out); Barella v. Exchange Bank (2000) 84 Cal.App.4th 793, 797; Sanford v. Rasnick (2016) 246 Cal.App.4th 1121, 1130; Fassberg Construction Co. v. Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th 720, 765.) Here, the parties did not submit conflicting extrinsic evidence regarding Ford's Code of Civil Procedure section 998 offer. The issue before us is whether or not the terms of Ford's Code of Civil Procedure section 998 offer support the court's interpretation that 40.4 percent of the total amount of $247,500 paid was for plaintiffs' fraud claims. We review this issue independently.
Contract principles apply to interpretation of Code of Civil Procedure section 998 offers. (Timed Out, supra, 21 Cal.App.5th at p. 942; Elite Show Services, Inc. v. Staffpro, Inc. (2004) 119 Cal.App.4th 263, 268 ["In interpreting a [Code of Civil Procedure] section 998 offer, general contract principles apply when they neither conflict with nor defeat the statute's purpose of encouraging the settlement of lawsuits prior to trial"].) One such principle is that "the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist." (§ 1654.) Thus, we construe ambiguities in a Code of Civil Procedure section 998 offer against the offeror. (Chinn v. KMR Property Management (2008) 166 Cal.App.4th 175, 185, disapproved on another ground in DeSaulles v. Community Hospital of the Monterey Peninsula (2016) 62 Cal.4th 1140, 1158; see also Berg v. Darden (2004) 120 Cal.App.4th 721, 727 (Berg) ["a [Code of Civil Procedure] section 998 offer is construed strictly in favor of the party sought to be subjected to its operation"].)
We conclude that the language of Ford's Code of Civil Procedure section 998 offer is clear and explicit that Ford's payment is for plaintiffs' Song-Beverly Act claim. The offer refers only to damages recoverable under the Song-Beverly Act as the basis of the payments Ford agreed to make and does not mention any other claims plaintiffs asserted in this case.
Paragraph No. 1 of Ford's Code of Civil Procedure section 998 offer divides the total payment of $247,500 into two subtotals: (1) the "paid or payable amount of $55,083.09 for Plaintiff's [sic] 2006 Ford 250"; and (2) "$192,416.91 in incidental and consequential damages and a two-time civil penalty under the Song-Beverly Act."
The subtotal of $55,083.09 evidently refers to the total sale price—actually $55,083.08—shown on the installment sales contract for the truck, which was attached to plaintiffs' complaint. Section 1793.2, subdivision (d), and section 1794, subdivision (b), of the Song-Beverly Act provide that the measure of damages includes reimbursement of the purchase price paid by the buyer.
Damages based on the price paid for the defective vehicle are subject to a reduction using a formula based on the vehicle's mileage before the buyer first delivered it to the manufacturer or distributor to repair the problem. (§ 1793.2, subd. (d)(2)(C).) However, Ford's Code of Civil Procedure section 998 offer does not apply the formula or calculate any reduction in damages. The offer simply states that the full sale price will be repaid.
The second subtotal consists of two components for which one amount is assigned: $192,416.91 for (1) "incidental and consequential damages," and (2) "a two-time civil penalty under the Song-Beverly Act."
As to the first component, the Song-Beverly Act provides for recovery of "any incidental damages to which the buyer is entitled under Section 1794, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer." (§ 1793.2, subd. (d)(2)(B)). Subdivisions (b)(1) and (2) of section 1794 refer to recovery under sections of the Commercial Code, including Commercial Code sections 2711, 2712, 2713, 2714 and 2715, setting forth categories of incidental and consequential damages.
The Song-Beverly Act also provides for recovery of the second component, the "two-time penalty." Subdivision (c) of section 1794 provides that "[i]f the buyer establishes that the failure to comply was willful, the judgment may include, in addition to the amounts recovered under subdivision (a) [of this section], a civil penalty which shall not exceed two times the amount of actual damages."
No other category of damages is mentioned and all of the three categories referenced are recoverable under the Song-Beverly Act.
Ford did contend that "Plaintiffs did not submit any evidence indicating the amount of their incidental and consequential damages in this action." However, it was Ford's task to draft a "clear and specific" Code of Civil Procedure section 998 offer. (Berg v. Darden, supra, 120 Cal.App.4th at p. 727.) "[T]he offer must be sufficiently specific to permit the recipient meaningfully to evaluate it and make a reasoned decision whether to accept it, or reject it and bear the risk he may have to shoulder his opponent's litigation costs and expenses. [Citation.]" (Ibid.) For this reason, "a [Code of Civil Procedure] section 998 offer is construed strictly in favor of the party sought to be subjected to its operation. [Citations.]" (Berg v. Darden, at p. 727.) If Ford intended to limit incidental and consequential damages under the Song-Beverly Act according to proof—and allocate the remainder to plaintiffs' fraud claims—it should have drafted the Code of Civil Procedure section 998 offer to make this "clear and specific." In fact, Ford's initial Code of Civil Procedure section 998 offer served on plaintiffs in 2013 did so. By contrast, in the Code of Civil Procedure section 998 offer that plaintiffs accepted in 2017, the term "incidental and consequential damages" refers to any portion of the amount $192,416.91 that is not covered by the two-times purchase price penalty.
"Nor did Plaintiffs present Ford with sufficient discovery to determine this amount on its own, as is the typical practice of Plaintiffs' counsel . . . ."
This offer stated "subject to proof, Ford will pay to plaintiffs any incidental and consequential damages to which plaintiffs are entitled under Civil Code Section 1793.2(d)(2)(B) and 1794(b), including, but not limited to, reasonable repair, towing and rental car costs actually incurred by plaintiffs. Plaintiffs are invited to submit an itemization of all incidental and consequential damages to Ford at the time they accept this offer together with proof of same."
Thus, applying the rule that a Code of Civil Procedure section 998 offer is construed strictly in favor of the offeree, we interpret all the components of the total settlement amount of $247,500 as payment for damages and penalties recoverable under plaintiffs' Song-Beverly Act claim.
That said, paragraph No. 2 of Ford's Code of Civil Procedure section 998 offer imports some ambiguity into the attorney fees issue. Paragraph No. 2 provides that "the fees, expenses and costs amount shall be calculated as if Plaintiff [sic] was found to have prevailed in an action under section 1794(d) . . . ." This language can be interpreted as confirmation that Plaintiffs are the prevailing party for purposes of a fees award. (§ 1794, subd. (d) [attorney fees are recoverable "if the buyer prevails in an action" under the Song-Beverly Act].) Or it can be interpreted as supporting Ford's and the trial court's position that the fee calculation should be apportioned according to the portion of the settlement payment that plaintiffs could potentially have recovered under the Song-Beverly Act had they prevailed. (Chen v. Interinsurance Exchange of the Automobile Club (2008) 164 Cal.App.4th 117, 122 [Code of Civil Procedure section 998 offer ambiguous as to whether it involved two claims asserted in lawsuit or three claims made under the appellants' insurance policies].)
Even were we to conclude the Code of Civil Procedure section 998 offer was ambiguous as to whether attorney fees were limited by the maximum recovery on plaintiffs' Song-Beverly Act claim, as the party that proposed the terms of the offer, Ford caused any ambiguity concerning apportionment. Ford could have provided that the total settlement amount was in payment of all claims that plaintiffs asserted and that attorney fees could be awarded only for the portion of the fees incurred in prosecuting the Song-Beverly Act or CLRA or both of them, for which fees are recoverable. (Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1133 ["When a cause of action for which attorney fees are provided by statute is joined with other causes of action for which attorney fees are not permitted, the prevailing party may recover only on the statutory cause of action"], citing Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129-130; see also Pellegrino v. Robert Half Internat., Inc. (2010) 182 Cal.App.4th 278, 288 [court reduced total fees amount by 15 percent to account for time spent on claim under unfair competition claim law, which does not provide for fees].) Instead, in an apparent effort to craft a Code of Civil Procedure section 998 offer that succeeded where others had failed, Ford characterized the total settlement amount in terms that invoked the Song-Beverly Act alone, notwithstanding a payment seemingly greater than plaintiffs' potential recovery under the statute. To the extent that Ford appeared to link calculation of attorney fees to what plaintiffs could recover had they prevailed on the Song-Beverly Act claim, Ford caused any uncertainty that may exist, and therefore the Code of Civil Procedure section 998 offer must be interpreted against Ford. (Berg v. Darden, supra, 120 Cal.App.4th at p. 727.)
We conclude the trial court erred in its interpretation of Ford's Code of Civil Procedure section 998 offer to allow apportionment of fees and reduction of the amount of attorney's fees by 40.4 percent as if incurred in prosecuting plaintiffs' fraud claims.
Ford requested that we take judicial notice of court records in another case consisting of a defendant's opposition to a motion for attorney fees, an order on the motion, and the oral transcript of the hearing on the motion. We deferred ruling on the request and now deny it. The records Ford submits for judicial notice concern the effect of a contingency fee agreement on a plaintiff's motion for hourly attorney fees under subdivision (d) of section 1794, which Ford argues would amount to improper "double-dipping." Specifically, Ford argues that there was no prejudice to plaintiffs from the trial court's percentage reduction in the fee award because their lawyers received a similar percentage of the recovery under a contingency fee agreement. However, it is established that attorney fees awarded under the Song-Beverly Act may not be based on a percentage of recovery. (Hanna v. Mercedes-Benz USA, LLC (2019) 36 Cal.App.5th 493, 510-511; Morris v. Hyundai Motor America, Inc. (2019) 41 Cal.App.5th 24, 35; Warren v. Kia Motors America (2018) 30 Cal.App.5th 24, 35.) Moreover, the records proposed for judicial notice postdate the trial court's attorney fees order in this case and were not presented to the trial court. Ford states that the records are relevant for the limited purpose of informing us of the recurring nature of this issue. We, however, find these documents to be irrelevant and unnecessary to our understanding of the case or our resolution of the appeal. (Duarte v. Pacific Specialty Ins. Co. (2017) 13 Cal.App.5th 45, 51, fn. 6.)
Use of Local Rates
Plaintiffs contend that the trial court also erred in reducing their hourly rates. Here we disagree. Plaintiffs presented no evidence that they had sought representation in this matter by a local attorney or that finding local counsel was impracticable, a threshold showing for recovery of the higher, out-of-town rates that plaintiffs sought. The court properly applied rates charged in the community for similar work in determining that a reasonable hourly rate in this case was $225 for associates and contract attorneys and $350 for partners.
In an awarding attorney fees under the Song-Beverly Act and in general, California courts use the "lodestar" approach, "the number of hours reasonably expended multiplied by the reasonable hourly rate." (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 (PLCM Group); Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 997.)
"The reasonable hourly rate is that prevailing in the community for similar work." (PLCM Group, supra, 22 Cal.4th at p. 1095; Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 155.) "The relevant 'community' is that where the court is located." (Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc. (2014) 226 Cal.App.4th 26, 71 (Altavion); MBNA America Bank, N.A. v. Gorman (2006) 147 Cal.App.4th Supp. 1, 13 (MBNA America Bank) ["determination of market rate is generally based on the rates prevalent in the community where the services are rendered, i.e., where the court is located"].) "[U]se of reasonable rates in the local community, as an integral part of the initial lodestar equation, is one of the means of providing some objectivity to the process of determining reasonable attorney fees. Such objectivity is ' " 'vital to the prestige of the bar and the courts.' " ' [Citations.]" (Nichols v. City of Taft (2007) 155 Cal.App.4th 1233, 1243 (Nichols).)
" 'The court may rely on its own knowledge and familiarity with the legal market in setting a reasonable hourly rate.' [Citation.]" (Nishiki v. Danko Meredith, P.C. (2018) 25 Cal.App.5th 883, 898.) "The courts repeatedly have stated that the trial court is in the best position to value the services rendered by the attorneys in his or her courtroom [citation], and this includes the determination of the hourly rate that will be used in the lodestar calculus." (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 437.) For that reason, while the trial judge's determination is subject to review, " ' "it will not be disturbed unless the appellate court is convinced that it is clearly wrong." ' [Citation.]" (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)
Nonetheless, "in the unusual circumstance that local counsel is unavailable" or "hiring local counsel was impracticable," the trial court may use the rate of counsel from a higher fee market in determining a reasonable hourly rate. (Horsford, supra, 132 Cal.App.4th at p. 399.) In Horsford, the plaintiff submitted an uncontradicted declaration that he was unsuccessful in obtaining local lawyers in Fresno to represent him before turning to a San Francisco lawyer. The Court of Appeal held that the trial court abused its discretion in using local Fresno rates. (Id. at pp. 398-399; see also Center for Biological Diversity v. County of San Bernardino (2010) 188 Cal.App.4th 603, 618-619 [a plaintiff's declaration that no local attorneys in San Bernardino practicing environmental law on behalf of environmental groups will do so for a reduced fee or on a contingent basis, and possess requisite expertise, was a sufficient showing that hiring qualified counsel in the area was impracticable]; Environmental Protection Information Center v. Department of Forestry & Fire Protection (2010) 190 Cal.App.4th 217, 249 [affirming trial court's use of out-of-town rates where the plaintiffs submitted a declaration from a local lawyer that he would not undertake primary representation in the suit and knew of no local counsel who would, as well as declarations from other local attorneys that would not have been willing to represent the plaintiffs at all]; compare Nichols, supra, 155 Cal.App.4th at pp. 1238, 1244 [a plaintiff police dispatcher's declaration regarding "close ties" between local lawyers and law enforcement was insufficient to show impracticability of local representation in a suit against city for sexual harassment]; Rey v. Madera Unified School Dist. (2012) 203 Cal.App.4th 1223, 1241 [affirming use of local rates where declarations were "speculative" regarding reluctance of central California attorneys to represent minority plaintiffs in voting rights cases].)
Here, the declaration submitted by plaintiffs' counsel does not state that plaintiffs attempted to retain local counsel or that it was impracticable to do so. Rather, plaintiffs' lead counsel, based in Los Angeles, stated that his $500 hourly rate was "consistent with other attorneys who litigate consumer matters and have a comparable level of experience." Counsel offered a "canvas" of hourly rates for the "community of attorneys who specialize in this area" of lemon law and consumer law, listing attorneys in San Diego, San Francisco, and Los Angeles and Orange counties, all higher rate markets than the county where the trial court is located. Plaintiffs' counsel apparently interpreted "community" to mean lawyers who specialize in lemon law litigation on behalf of plaintiffs and are located in higher rate markets. (Cf. Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 40 ["Warren adduced unrebutted evidence that her attorneys' requested hourly rates were within the range of the hourly rates charged by other plaintiffs' attorneys practicing consumer law"].) But that is not the meaning articulated by California courts, which look to the home rate for similar work and consider out-of-town rates only where local representation cannot be obtained. (Altavion, supra, 226 Cal.App.4th at p. 71; MBNA America Bank, supra, 147 Cal.App.4th Supp. at p. 13.)
Because plaintiffs did not establish that obtaining local counsel was impracticable and evidently made no effort to find local counsel, we conclude that the trial court did not abuse its discretion in using local rates to calculate attorney fees.
DISPOSITION
The attorney fees order is reversed and the trial court is directed to vacate its order reducing plaintiffs' attorney fees by 40.4 percent. On remand, the court is to recalculate attorney fees reasonably incurred by plaintiffs without a 40.4 percent reduction. In all other respects, the judgment and order on attorney fees and costs is affirmed. Each party is to bear its own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)
/s/_________
RAYE, P. J. We concur: /s/_________
DUARTE, J. /s/_________
RENNER, J.