Morris v. Hyundai Motor Am., No. B290693 (D2d7 Oct. 11, 2019)
An appeal of a attorneys’ fee award in a Song-Beverly Act case. In those cases, a prevailing attorney gets paid based on “actual time expended,” regardless of the size of the recovery. That encourages good attorneys to take these cases because the attorneys can get fully compensated despite the typical mid-five figure amount in controversy. Unfortunately, it also sometimes encourages overbilling.
Plaintiffs’ lawyers here sought about $200k―$128k with a 1.5 multiplier―but got whacked down to $75k by the trail court. Plaintiff argues the trial court engaged in a prohibited “proportionality analysis,” where a fee award gets reduced to be in line with the recovery. That’s not ok in Lemon Law cases because that is not “actual time expended.” But that’s not what happened here, so far as the Court of Appeal reads the record.
Instead, the judge reduced the award because he thought the lawyers overstaffed the case. Eleven different attorneys from two firms billed on the case, in which discovery was not litigated and did not go to trial. The court found six attorneys be redundant and cut their time entirely. It also cut the rates.
None of that was an abuse of discretion. A trial court can use across the board cuts if it feels like an unreasonable amount of time has gone into a lodestar. For instance, instead of cutting six lawyers, the court could have cut 30 percent of each lawyer’s time. That would have reached the same result and been fine. The court also had discretion to reduce the billers’ hourly rates, notwithstanding unrebutted evidence that the rates charged were similar to those for other attorneys in the same area of practice. The court could have found, for instance, that that the matter wasn’t all that complex, that the case didn’t go to trial, or that senior partners were doing associate-grade work.
Affirmed.
Showing posts with label hyundai. Show all posts
Showing posts with label hyundai. Show all posts
Monday, October 28, 2019
Monday, April 27, 2015
I Want My Two Dollars . . . .
Hyundai Motor of Am. v. Superior Court, No. G051279 (D4d3 Mar. 20, 2015)
The is a Song-Beverly warranty case where the Hyundai made a full value plus attorneys’ fees offer under Code of Civil Procedure § 998 for the entire value of a car plaintiff claimed was a lemon. Plaintiff took the offer. The trial court awarded him $42k in attorneys’ fees. Plaintiff also demanded post-judgment interest on the fee award, running from the acceptance of the § 998 offer. The court declined. After all, judgment hadn’t been entered yet.
Hyundai paid off the entire fee amount—with judgment still not yet entered—but Plaintiff claimed the payout was $462.50 short for interest between the fee award hearing and the payoff. Plaintiff’s counsel then began judgment enforcement proceedings for his four hundred bucks, including noticing a judgment debtor exam of the CEO of Hyundai’s US sub. Plaintiff also filed a number of cost memos demanding ever-increasing cost awards.
Hyundai challenged the cost memos with the trial court. It determined that, notwithstanding the fact that judgment had not been entered until shortly before the hearing, its fee award was, in effect, an enforceable judgment that accumulated 10 percent post-judgment interest from the date of the order. Hyundai took a writ.
This isn’t too hard. Post-judgment interest accrues from the entry of final judgment. No judgment, no post-judgment interest. That includes cases where § 998 offers are accepted and judgment isn’t entered till later. And it also includes pre-judgment fee awards that are later subsumed into a final judgment.
Writ granted.
The court of appeal goes on to explain that a peremptory writ—a writ granted without following the formal order to show cause process—is appropriate in this case. The court issued a Palma notice—a warning that it was considering entering a peremptory writ so the respondent better chime in right away. Upon reviewing plaintiff’s Palma response, it decided Hyundai’s right to relief was clear. Moreover, the court took particular notice of plaintiff’s counsel’s unprofessional move of noticing an apex judgment debtor exam of Hyundai America’s CEO to collect on a bogus $462.50 debt. The court felt like that kind of ridiculous litigation tactic required it to step in on an emergency basis.
The is a Song-Beverly warranty case where the Hyundai made a full value plus attorneys’ fees offer under Code of Civil Procedure § 998 for the entire value of a car plaintiff claimed was a lemon. Plaintiff took the offer. The trial court awarded him $42k in attorneys’ fees. Plaintiff also demanded post-judgment interest on the fee award, running from the acceptance of the § 998 offer. The court declined. After all, judgment hadn’t been entered yet.
Hyundai paid off the entire fee amount—with judgment still not yet entered—but Plaintiff claimed the payout was $462.50 short for interest between the fee award hearing and the payoff. Plaintiff’s counsel then began judgment enforcement proceedings for his four hundred bucks, including noticing a judgment debtor exam of the CEO of Hyundai’s US sub. Plaintiff also filed a number of cost memos demanding ever-increasing cost awards.
Hyundai challenged the cost memos with the trial court. It determined that, notwithstanding the fact that judgment had not been entered until shortly before the hearing, its fee award was, in effect, an enforceable judgment that accumulated 10 percent post-judgment interest from the date of the order. Hyundai took a writ.
This isn’t too hard. Post-judgment interest accrues from the entry of final judgment. No judgment, no post-judgment interest. That includes cases where § 998 offers are accepted and judgment isn’t entered till later. And it also includes pre-judgment fee awards that are later subsumed into a final judgment.
Writ granted.
The court of appeal goes on to explain that a peremptory writ—a writ granted without following the formal order to show cause process—is appropriate in this case. The court issued a Palma notice—a warning that it was considering entering a peremptory writ so the respondent better chime in right away. Upon reviewing plaintiff’s Palma response, it decided Hyundai’s right to relief was clear. Moreover, the court took particular notice of plaintiff’s counsel’s unprofessional move of noticing an apex judgment debtor exam of Hyundai America’s CEO to collect on a bogus $462.50 debt. The court felt like that kind of ridiculous litigation tactic required it to step in on an emergency basis.
Tuesday, January 13, 2015
Collecting on a Big Foreign Judgment
Hyundai Securities Ltd. v. Lee, No. B257276 (D2d5, as modified Jan. 14, 2015)
Mr. Lee, a former officer of Hyundai, got tagged with a $24 million judgment, based in part on a Korean court's ordering him to indemnify the company for certain criminal fines it paid due to his conduct. The judgment carries post-judgment interest at the rate of 20 percent—the statutory rate for Korea. About $5 million in principal and $3 million in interest remain, and Hyundai is now trying to collect in California.
So Hyundai filed an action to have the judgment recognized under the Uniform Foreign Country Money Judgments Recognition Act, Code of Civil Procedure § 1713–24. In a prior appeal, the court held that, procedure-wise, a foreign country judgment can’t be domesticated by a simple petition; its validity needs to be recognized through trial or on summary judgment. So on remand, Hyundai did just that. The trial court found the judgment enforceable, including the accrued Korean interest, plus 20 percent interest going forward.
Lee raises three issues. First, he says that a California court should not have enforced the judgment under § 1715(b)(2), which excludes fines or other penalties from the scope of the Act. The gist of the provision is that the judiciary generally isn’t in the business of enforcing the public law, and in particular, the penal law, of other countries. So Lee says that since Hyundai's underlying liability that he is stuck with indemnifying was a criminal fine levied by the Korean government, a California court shouldn’t enforce that against him.
But the court here doesn’t agree. Although the judgment might be requiring Lee to compensate Hyundai for damage it incurred by being fined, it was nonetheless a civil damage award in favor of a private party. Nothing in the case law or legislative of either the California Act, the promulgated Uniform Act, or in other states’ enactment of the Act says otherwise. Indeed, the weight of the authority suggests that the rule is meant to address situations where the sovererign itself is the judgment creditor.
Second, Lee says that the accrued Korean interest should not have been awarded. Generally, a party attempting to enforce a foreign judgment gets the same kind of post-judgment interest that a party enforcing a sister-state judgment would, § 1715, and for prior to the recognition of the judgment by a California court, that means the rate of interest under the law of that state, § 1710.25(a)(2). But Lee says 20 percent is “repugnant to the public policy of this state or United States,” and thus unenforceable under §1716(c)(3). In particular, Lee points to the 10 percent cap on post-judgment interest in Article 15 § 1 of the state constitution. But the fact that the Korean statutory rate is twice the state cap is not so offensive to public policy to make it repugnant under the standard of the Act. Repugnancy is a high bar, reserved for practices such as those that are injurious to public health, offensive to individual rights, or that undermine the administration of law. Double interest just isn’t enough.
Finally, Lee argues that the court should not have awarded prospective 20 percent interest on the now-domesticated judgment. This one bears fruit. As noted, § 1715 adopts the sister state standard for foreign judgments. Under § 1710.25, once a sister state is domesticated, the court applies California’s 10 percent interest rate to the domesticated judgment going forward. The idea is that the new interest wasn’t part of the original Korean judgment, but a new merged California judgment that should carry California interest.
Which brings up a point. If you have a foreign or sister state judgment that carries interest over 10 percent, it probably doesn't make sense to domesticate it until you are on the verge of being able to collect. Otherwise, you are giving money away.
Reversed in part and remanded.
Mr. Lee, a former officer of Hyundai, got tagged with a $24 million judgment, based in part on a Korean court's ordering him to indemnify the company for certain criminal fines it paid due to his conduct. The judgment carries post-judgment interest at the rate of 20 percent—the statutory rate for Korea. About $5 million in principal and $3 million in interest remain, and Hyundai is now trying to collect in California.
So Hyundai filed an action to have the judgment recognized under the Uniform Foreign Country Money Judgments Recognition Act, Code of Civil Procedure § 1713–24. In a prior appeal, the court held that, procedure-wise, a foreign country judgment can’t be domesticated by a simple petition; its validity needs to be recognized through trial or on summary judgment. So on remand, Hyundai did just that. The trial court found the judgment enforceable, including the accrued Korean interest, plus 20 percent interest going forward.
Lee raises three issues. First, he says that a California court should not have enforced the judgment under § 1715(b)(2), which excludes fines or other penalties from the scope of the Act. The gist of the provision is that the judiciary generally isn’t in the business of enforcing the public law, and in particular, the penal law, of other countries. So Lee says that since Hyundai's underlying liability that he is stuck with indemnifying was a criminal fine levied by the Korean government, a California court shouldn’t enforce that against him.
But the court here doesn’t agree. Although the judgment might be requiring Lee to compensate Hyundai for damage it incurred by being fined, it was nonetheless a civil damage award in favor of a private party. Nothing in the case law or legislative of either the California Act, the promulgated Uniform Act, or in other states’ enactment of the Act says otherwise. Indeed, the weight of the authority suggests that the rule is meant to address situations where the sovererign itself is the judgment creditor.
Second, Lee says that the accrued Korean interest should not have been awarded. Generally, a party attempting to enforce a foreign judgment gets the same kind of post-judgment interest that a party enforcing a sister-state judgment would, § 1715, and for prior to the recognition of the judgment by a California court, that means the rate of interest under the law of that state, § 1710.25(a)(2). But Lee says 20 percent is “repugnant to the public policy of this state or United States,” and thus unenforceable under §1716(c)(3). In particular, Lee points to the 10 percent cap on post-judgment interest in Article 15 § 1 of the state constitution. But the fact that the Korean statutory rate is twice the state cap is not so offensive to public policy to make it repugnant under the standard of the Act. Repugnancy is a high bar, reserved for practices such as those that are injurious to public health, offensive to individual rights, or that undermine the administration of law. Double interest just isn’t enough.
Finally, Lee argues that the court should not have awarded prospective 20 percent interest on the now-domesticated judgment. This one bears fruit. As noted, § 1715 adopts the sister state standard for foreign judgments. Under § 1710.25, once a sister state is domesticated, the court applies California’s 10 percent interest rate to the domesticated judgment going forward. The idea is that the new interest wasn’t part of the original Korean judgment, but a new merged California judgment that should carry California interest.
Which brings up a point. If you have a foreign or sister state judgment that carries interest over 10 percent, it probably doesn't make sense to domesticate it until you are on the verge of being able to collect. Otherwise, you are giving money away.
Reversed in part and remanded.
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