Car Purchasers “Gambling” On Other Remedies Other Than Repurchase Might Have Repercussions – No Fee Recovery!
This case counsels that car purchasers and their attorneys in lemon law cases (equally applicable to situations involving consumer items other than cars as well) need to carefully think about rejecting a repurchase capitulation by a car manufacturer rather than take the “gamble” by rolling the dice to see they will receive civil penalties and attorney’s fees based on a litigation casino mentality. These lessons are well illustrated by the result in Nielsen v. FCA US LLC, Case No. A151659 (1st Dist., Div. 5 Aug. 23, 2018) (unpublished).
There, disgruntled Jeep Grand Cherokee purchaser believed the vehicle suffered from electrical/engine defects, seeking a repurchase by the car manufacturer under California’s lemon law which does have a fee-shifting clause if a court determines that the buyer “prevails” in the action. (Civ. Code, § 1794(d).) Needless to say, in both informal and a formal CCP § 998 offer requiring some documentation from buyer, car manufacturer basically offered to give car purchaser a repurchase option, along with some other incidental compensatory items. Car purchaser did not accept any of the offers, proceeded to trial, and obtained a stipulated amount of $48,267.41 from a jury under an implied warranty theory as far as a restitutionary remedy (given car manufacturer conceded this was the amount due under this scenario, a smart move). However, the jury found that manufacturer was not obligated to repurchase the car and was not liable for other damages, a civil penalty, or further relief.
Car buyer believed he “prevailed” and requested $280,275 in attorney’s fees under the lemon law fee provision, which included a 1.25 multiplier, as well as $21,180.96 in costs.
The trial court would have none of it, denying the motion in entirety.
Car purchaser appealed, but to no avail. The dispositive issue was whether car buyer “prevailed” under the lemon law fee statute. He did not. Because a pragmatic approach of whether a litigant achieved his/her main litigation objective is the guiding standard, it was not hard to decipher that car buyer nixed the repurchase/make whole option offered by car manufacturer based on a “gamble” of obtaining civil penalties and other relief, which simply did not happen. So, car buyer and his attorneys likely will go home feeling disgruntled, maybe not recognizing the “gamble” which the trial and appellate courts saw all so clearly.
BLOG OBSERVATION—Although the appellate court did not have to resolve whether car manufacturer’s 998 offer was valid (although the lower court found that it was), this decision is great for car manufacturers/dealers to read as far as potentially structuring a 998 offer, which is quoted in full. We believe that the appellate court might well have found it valid, given that the specific damages substantiation was a matter within plaintiff’s control and given that an offeree usually has an obligation to ask for clarification if an offer is ambiguous to the offeree/offeree’s counsel even though fairly clear from an objective standpoint.