Appeals Court Upholds Lower Court Ruling for Attorney’s Fees in RFDCPA Case

The California Court of Appeals has upheld a lower court’s ruling awarding $30,450 in attorney’s fees to the lawyers representing a plaintiff in a Rosenthal Fair Debt Collection Practices Act case — which was about $68,000 less than the plaintiff was seeking.

A copy of the ruling in the case of First Technology Federal Credit Union v. Trojan can be accessed by clicking here.

The plaintiff defaulted on a car loan, after she stopped making payments because she was experiencing problems with the vehicle. The vehicle was repossessed and the plaintiff was sued by the defendant for the remaining balance on the loan. The plaintiff filed a cross-complaint, alleging violations of the RFDCPA and the Automobile Sales Finance Act. Ultimately, the case was settled, with the plaintiff receiving $2,001 plus attorney’s fees and costs. The plaintiff submitted a motion for $94,870, based on hourly rates of $500, $600, and $700 for the three attorneys who represented her. The plaintiff also sought a 1.5 lodestar enhancement on top of that amount based on the risk of her attorneys accepting the case on a contingency basis. The defendant argued that a reasonable rate in the local community was between $350 and $450 per hour and that it should not be required to compensate the attorneys for the 30 hours that were spent drafting a motion for summary judgment that was not filed. A state court judge agreed with the defendant and awarded $30,450 in attorney’s fees, which the plaintiff appealed.

The plaintiff argued that the rates she sought were appropriate based on where her lawyers were located and that he attorneys should not be penalized because she was unable to find local counsel. “Although Trojan’s declaration does more than allege a generalized fear that she could not retain local counsel, we cannot conclude that the trial court abused its discretion by making an implied finding that Trojan’s showing regarding hiring local counsel was insufficient,” the Appeals Court wrote. “… we cannot conclude that the trial court acted outside the bounds of reason when it awarded attorney fees based on the prevailing local rate.”

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