Covarrubias v. Ford Motor Company

Background

Alexis Covarrubias brought a lemon-law action under California’s Song-Beverly Consumer Warranty Act against Ford Motor Company and Citrus Motors Ontario, Inc. The lawsuit concerned alleged defects in her 2012 Ford F-150, including problems with the engine, transmission, and electrical system. She alleged that Ford and its representatives could not repair the vehicle after a reasonable number of opportunities and did not replace the vehicle or provide restitution.

Ford removed the case from state court based on diversity jurisdiction. The court denied Covarrubias’s motion to return the case to state court, finding that Citrus Motors had been fraudulently joined and that the claim against Citrus Motors was time-barred. The parties later settled under Federal Rule of Civil Procedure 68. Covarrubias surrendered the vehicle, and her counsel received the settlement funds. She then moved for $66,719.20 in attorneys’ fees and costs.

Fee analysis

Under California law, a buyer who prevails under the Song-Beverly Act may recover reasonable attorneys’ fees, costs, and expenses. A party may qualify as prevailing after a settlement if the settlement achieves the party’s main litigation objective. Ford did not dispute that Covarrubias was entitled to reasonable fees, costs, and expenses. The dispute concerned the amount.

The court used the lodestar method, which calculates fees by multiplying the reasonable hours worked by a reasonable hourly rate. Ford challenged 6.1 hours spent preparing discovery responses shortly before settlement, 25 hours spent litigating the unsuccessful motion to return the case to state court, and 13.4 hours spent preparing the fee motion. The court rejected each challenge. It found that the discovery work could reasonably have been necessary because the responses were due before the case settled. It also found that the unsuccessful remand motion was not frivolous or brought in bad faith. Finally, Ford offered no evidence that the fee motion was unreasonably duplicative or excessive.

The court also found the requested hourly rates reasonable. It relied on evidence about the attorneys’ experience, rates approved in other California cases, and consumer-law fee data. The court rejected Ford’s comparison to the lower rates Ford paid its own attorneys because Covarrubias’s attorneys worked on a contingency-fee basis while Ford’s attorneys were paid hourly.

The court denied Covarrubias’s request for a 1.35 lodestar multiplier. It concluded that the case did not involve novel or complex issues, did not prevent the law firm from taking other work, and did not require extraordinary legal skill. The court awarded the lodestar amount without either a positive or negative multiplier.

Disposition

The court granted Covarrubias all of her counsel’s requested costs and expenses. It granted in part and denied in part the motion for attorneys’ fees and costs. The court ordered Ford to pay a total of $51,215.77: $44,295.50 in attorneys’ fees, $3,420.27 in costs and expenses, and $3,500 in additional fees and costs for replying to Ford’s opposition. Judge Edward M. Chen stated that the order disposed of Docket No. 63.