Fourth District, Division 3 Utilizes De Novo Review to Determine Plaintiff’s Entitlement to Fee Award.
The next case demonstrates how the standard of review can be appeal determinative. The appellate panel utilized the de novo standard, which led to the conclusion that the trial court erred in denying plaintiff entitlement to fees under car lemon laws where the settlement agreement with car manufacturer called for them—even though the key issue on remand will be the amount of fees given that plaintiff’s settlement was very modest indeed.
The Fourth District, Division 3, in Vazquez v. Hyundai Motor America, Case No. G041152 (4th Dist., Div. 2 Oct. 13, 2009) (unpublished), confronted a situation where a plaintiff with car lemon law gripes actually settled twice with a car manufacturer given some ambiguities in the initial settlement agreement. Plaintiff apparently obtained an initial compromise by which the car dealership paid $6,000 in cash and the car manufacturer agreed to defend the fee application to be subsequently brought by plaintiff.
(This settlement was much less than the almost $81,000 plaintiff asked for in an MSC statement, broken down as $54,000 to plaintiff and almost $27,000 in fees and costs to her attorneys.) In the second agreement, car manufacturer also agreed to reimburse plaintiff, less mileage and other offsets, the amount of $3,171.77 and also pay off her loan in return for a lawsuit dismissal and return of the car. The second agreement provided that the trial court, in binding fashion, could determine the proper amount of fees, but that if the fee award was between zero and $2,999.00, plaintiff would get a “guaranteed” minimum of $3,000 in any event. Plaintiff filed a fee motion seeking $51,012 in fees and costs, plus a multiplier enhancement of 1.5. The trial court denied fees outright, and plaintiff appealed.
She won on appeal.
[Photo: July 1942. Even the oldest jalopies were out to have their tanks filled on the day before stricter gasoline rationing went into effect. Photographer: Marjorie Collins. Library of Congress]
The key upfront issue was what standard of review governed the appeal. Justice Moore, on behalf of a 3-0 panel, determined it was de novo, because the settlement agreement and lemon laws did show that plaintiff had an entitlement to some amount of fees. The trial court’s refusal to award something was erroneous.
With this important point resolved, the appellate court correctly observed that the Consumers Legal Remedies Act (Civ. Code, sec. 1780(e)) and Song-Beverly Consumer Warranty Act (Civ. Code, sec. 1794(d)) have mandatory fee-shifting provisions in favor of plaintiff consumers. Car manufacturer argued that its actions in offering a prompt refund to plaintiff ended any entitlement to fees, but the appellate court found that the refund did not address additional claims at issue (repair costs, plus an additional stipulation that plaintiff forego claims against the car dealership). It also contended, under the CLRA, that its offer to buy back the vehicle within 30 days was the end of the CLRA claim; however, its refusal to deal with the out-of-pocket repair costs did not preclude plaintiff’s CLRA claim given the outstanding repair issue. “Whether or not the litigation ultimately achieved her goal, she was not precluded from bringing a CLRA claim. To say otherwise would mean that any manufacturer who offered a consumer a part of the compensation requested, no matter how reasonable, is immune from a CLRA claim for damages. We decline to interpret the statute in such a fashion, and find no case law supporting such a reading.”
However, the appellate panel did show that the future battle on remand would be the reasonable amount of fees to be awarded plaintiff. Only reasonable fees are awardable under the lemon laws, and the “trivial” amount of plaintiff’s recovery was certainly a factor to weight in this future fee battle—although it did not preclude her entitlement to fees in a reasonable amount as determined by the trial court.