In Karapetian v. Kia Motors America, Inc., — F.Supp.2d —-, 2010 WL 4678691 (C.D.Cal. 2010), Judge Carney exercised his discretion to reduce Plaintiff’s attorneys’ fees in a lemon law case.  In Karapetian, the Plaintiff’s counsel rejected the defendant’s Rule 68 offer and did not do better in the ultimate settlement of the Action, even though Plaintiff prevailed in the case.  Judge Carney found that any attorneys’ fees incurred after the Rule 68 offer were unreasonable, and therefore not recoverable under the Song-Beverly Act.  Judge Carney explained:


California’s Song-Beverly Consumer Warranty Act, Cal. Civ.Code § 1790 et seq., provides that a prevailing buyer “shall be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses, including attorney’s fees based on actual time expended, determined by the court to have been reasonably in-curred by the buyer in connection with the commencement and prosecution of such action.” Cal. Civ.Code § 1794(d) (emphasis added). The inquiry is “whether under all the circumstances of the case the amount of actual time expended and the monetary charge being made for the time expended are reasonable.” Nightingale v. Hyundai Motor Am., 31 Cal.App. 4th 99, 104 (1994); see also Doppes v. Bentley Motors, Inc., 174 Cal.App. 4th 967, 998 (2009). “If the time expended or the monetary charge being made for the time expended are not reasonable under all the circumstances, then the court must take this into account and award attorney fees in a lesser amount.” Nightingale, 31 Cal.App. 4th at 104 (emphasis added); see also Levy v. Toyota Motor Sales, U.S.A., Inc., 4 Cal.App. 4th 807, 815-16 (1992) (prevailing party not necessarily entitled to all claimed attorneys’ fees). The prevailing buyer, Mr. Karapetian, bears the burden of demonstrating all of the following: “the [attorneys’] fees incurred were allowable, were reasonably necessary to the conduct of the litigation, and were reasonable in amount.” Nightingale, 31 Cal.App. 4th at 104 (quoting Levy, 4 Cal.App. 4th at 816) (internal quotation marks omitted). The Court retains discretion to reduce the fee award where fees were not reasonably incurred. See, e.g., Ketchum v. Moses, 24 Cal.4th 1122, 1132 (2001) ( “ ‘[P]adding’ in the form of inefficient or duplicative efforts is not subject to compensation.”); Gorman v. Tassajara Dev. Corp., 178 Cal.App. 4th 44, 101 (2009) (“A reduced [attorneys’ fees] award might be fully justified by a general observation that an attorney overlitigated a case or submitted a padded bill or that the opposing party has stated valid objections.”); EnPalm, LCC v. Teitler Family Trust, 162 Cal.App. 4th 770, 775 (2008) (holding trial court has discretion to reduce fees awarded “to the extent they were unnecessary”); id. at 774 n. 4, 775 (affirming trial court’s 90% reduction of fees awarded pursuant to parties’ contract where prevailing defendant’s false statements unnecessarily extended the litigation such that “most of the time incurred by appellants’ counsel was not reasonable”). . . .¶ . . . In short, the February 2010 settlement’s (1) lack of a general release and (2) provision permitting recovery of post-settlement fees fall far short of victories warranting a finding that Mr. Karapetian’s counsel reasonably incurred $103,221 in fees and $3,382 .98 in costs between November 2008 and February 2010. Making such a finding and setting such a precedent would provide too great of a perverse incentive for attorneys to unnecessarily draw out litigation in similar cases involving statutes permitting recovery of attorneys’ fees. See Haworth v. Nevada, 56 F.3d 1048, 1052 (9th Cir.1995) ( “Just because a plaintiff has a[ ] … violation [of a statute permitting recovery of attorneys’ fees] in her pocket does not give her a license to go to trial, run up the attorney fees and then recover them from the defendant.”). It would also encourage plaintiffs to unreasonably reject Rule 68 offers or their state law equivalents when they expect to extract any further concessions in a later settlement or obtain even slightly more favorable results at trial. The Court exercises its discretion to decline to pro-vide such incentives or reward such conduct in this case. Mr. Karapetian has satisfied his burden that his attorneys reasonably incurred $20,507.75 in attorneys’ fees and $350 in costs, see Anderson Decl. Supp. Mot. Exs. 1-3 (fees and costs incurred prior to KMA’s November 2008 Rule 68 offer), and he is entitled to an award in just that amount, no more.