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Court of Appeal:
C.A. Panel Disavows Its Earlier Opinion on Attorney Fees
Fourth District’s Div. One Repudiates Its Pronouncement That Plaintiff in a ‘Lemon Law’ Case Is Entitled to Attorney Fees If There Is a ‘Net Monetary Recovery’; Says Litigation Objectives Must Be Considered
By a MetNews Staff Writer
Div. One of the Fourth District Court of Appeal yesterday reversed an order granting $684,250 in attorney fees to the plaintiff in a “lemon law” case who was awarded damages of only $1, and in so doing, repudiated the division’s own 1997 decision that says the plaintiff is necessarily the prevailing party is such a case if there is a “net monetary recovery.”
The discarded decision in Reveles v. Toyota by the Bay was handed down on Sept. 22, 1997. It was authored by Justice Don R. Work, now deceased.
Yesterday’s opinion was written by Acting Presiding Justice Richard D. Huffman, who had joined in Work’s opinion 24 years ago. He reflected:
“Our determination of what constitutes a prevailing buyer under Song-Beverly [Consumer Warranty Act] appears to be a minority position among California appellate courts. Instead of following Reveles, a number of courts have elected to take a more ‘pragmatic’ and less restrictive approach to assess whether a buyer has prevailed….Under that approach, it is not enough for a buyer to show that she ‘obtained a net monetary recovery.’…Instead, courts ask: To what extent did the buyer achieve her litigation objectives?...By and large, litigation objectives are measured by what the party sought to obtain by filing suit.”
2015 Opinion
One such case, he noted, is MacQuiddy v. Mercedes-Benz USA, LLC, decided on Jan. 2, 2015, by Div. Eight of this district’s Court of Appeal.
“[A]fter remanding this matter back to the trial court to reconsider the attorney fees issue,” Huffman wrote, “we conclude that the court must employ the pragmatic, litigation-objective analysis set forth in MacQuiddy….”
San Diego Superior Court Judge San Diego County, Katherine A. Bacal made the award of fees pursuant to Civil Code §1794(d), a part of the Song-Beverly Act. It says:
“If the buyer prevails in an action under this section, the 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….”
‘Mechanical Approach’
Huffman said:
“[T] he trial court appears to have interpreted the phrase ‘buyer prevails in an action’ to mean that a plaintiff need only prove a single claim under Song-Beverly (regardless of any net recovery or achievement of litigation objectives) and the court must award reasonable attorney fees. Such a mechanical approach to section 1794, subdivision (d) would make attorney fees almost automatic in any case where a buyer proved his claim even if he was not harmed and proved no damages. Yet, Song-Beverly’s purpose is not inevitably awarding attorney fees to buyers.” The jurist pointed to subd. (a) of §1794 which provides:
“Any buyer of consumer goods who is damaged by a failure to comply with any obligation under this chapter or under an implied or express warranty or service contract may bring an action for the recovery of damages and other legal and equitable relief.”
He remarked that the plaintiff, Ken Duff, “was awarded substantial attorney fees under subdivision (d) of section 1794 without being damaged as required in subdivision (a).”
The defendant is Jaguar Land Rover of San Diego which leased to Duff a vehicle that needed repairs on multiple occasions. Duff wound up purchasing that vehicle.
Bacal found that he had suffered no harm and awarded nominal damages based on a breach of warranty.
§998 Offer
She rejected the defendant’s contention that Duff was barred from an award of fees based on his having spurned an offer of compromise pursuant to Code of Civil Procedure §998. Jaguar said it would repurchase the vehicle for Jaguar $28,430.80—or more if Duff could “provide documentation to show the amount is more than $28,430.80.”
‘Moving Target’
The judge found the offer to be too uncertain to be valid under §998. Huffman agreed, saying:
“Here, our concern is that Jaguar’s 998 Offer presents somewhat of a moving target. For example, if Duff were awarded an amount over $28,430.80, say $30,000, it is not clear, by the terms of the statutory offer that the amount was greater than what Jaguar was offering to pay. Jaguar could argue, based on the evidence offered by Duff at trial, that it actually would have paid him more than $30,000, and thus, Duff recovered less than the 998 Offer.”
Bacal also awarded Duff $22,884.63 in costs. That award, made after Jaguar filed a notice of appeal, was not a subject of the appeal, and Huffman said in a footnote:
“Nothing in this opinion affects the legal standard by which the trial court determined Duff was the prevailing party for purposes of recovering costs.”
The case is Duff v. Jaguar Land Rover North America, LLC, 2022 S.O.S. 332.
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