Monday, December 31, 2018
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Ignoring Invalid §998 Offer Didn’t Bar Plaintiff’s Later Attorney Fees—C.A.
By a MetNews Staff Writer
The Fourth District Court of Appeal has declared a judge acted unreasonably in making an attorney-fee award that excluded all fees incurred after an invalid statutory offer of compromise was made based on her notion that the plaintiffs should have stopped litigating at that point—even though the offer was for $40,000 and the ultimate settlement was for $76,000.
The opinion was written by Justice Terry B. O’Rourke of Div. One and certified for publication on Thursday, after initially being filed as an unpublished opinion on Dec. 6.
Then-San Diego Superior Court Judge Joan M. Lewis, whose last day on the bench was Friday and is now retired, found defendant FCA US LLC’s initial Code of Civil Procedure §998 offer in a lemon law case brought by Jaime L. Etcheson and Kelly M. Etcheson to be impermissibly vague. A second offer under §998, made more than a year later, was also found faulty, but prompted negotiations which led to the settlement of the case for $76,000 with agreement that the Echesons were the “prevailing parties” for the purpose of seeking an attorney-fee award.
The judge initially found the plaintiffs’ motion for fees reasonable, indicating her intention to award them $81,000 plus costs, nearly their entire lodestar request, though she did not credit their one-and-a-half times multiplier.
Actual Award
Upon making her final award, however, Lewis granted only $2,000 in fees.
She said:
“The Court concludes that it cannot make a finding that the fees Plaintiffs seek were reasonably incurred in the prosecution of this action when it appears abundantly clear that Defendant from the beginning was trying to extricate itself from the case— simply asking the Plaintiffs to tell it what the appropriate dollar amount was—with no cooperation from the Plaintiffs. Neither Plaintiffs’ arguments at the hearing nor in their papers provided a satisfactory explanation for the continued litigation of this case after Defendants’ initial settlement offers.”
She added:
“The Court concludes that but for the services up to March 13, 2015, the remaining fees charged were not necessary and, therefore, not reasonably incurred.”
Offers Unacceptable
O’Rourke wrote:
“In this case,…we cannot indulge an inference that the trial court’s order drastically reducing plaintiffs’ fee request from $89,445 to $2,636 was based on a legitimate lodestar assessment of the overall reasonableness of counsel’s fees based on rates, duplication of effort, or complexity. The court here found counsel’s hourly rates and the time spent on tasks to be reasonable. Rather, it expressly based its ruling on the necessity of plaintiffs’ continued efforts in litigating the case to the eventual settlement. But…FCAs settlement offers were unacceptable; the first informal offer required them to sign a release without stating any release terms, and the second was insufficiently specific, as the trial court found.”
He added:
“Absent a court finding that FCA’s conduct was not willful as a matter of law, plaintiffs were entitled to proceed to litigate the issue of FCA’s willfulness and pursue their claims for not only restitution, but civil penalties under the Act….Plaintiffs’ persistence eventually paid off; they reached a result in keeping with their efforts when they settled with FCA for $76,000 and were deemed the prevailing parties entitled to recover their reasonable attorney fees. In evaluating reasonableness, ‘the most critical factor is the degree of success obtained.’…Plaintiffs here achieved a relatively high degree of success in resolving their claims.”
The case is Etcheson v. FCA US LLC, D072793.
Copyright 2018, Metropolitan News Company