No Judgment Needed and Dismissal With Prejudice Sufficient to Shift Fees and Costs Under Song-Beverly Act Scheme.
The Fifth District in Wohlgemuth v. Caterpillar, Inc., Case No. F061981 (5th Dist. July 23, 2012) (partially published) answered some interesting questions about the nature of Code of Civil Procedure section 998 fee-shifting in the context of a failure-to-repair consumer product defect case.
Defendant made a $50,000 998 offer in a Song-Beverly Warranty Act case, which was silent as to fees and costs. Plaintiff accepted the 998 offer and dismissed the case voluntarily in line with the offer, then moving for recovery for fees and costs. Defendant argued that it was the prevailing party, but the trial court rejected this notion--awarding plaintiff $117,625 in fees and $7,737.08 in costs. (Wow, get again, fees/costs in even minor disputes can be the ultimate outcome determinator--see our Mission Statement if you don’t believe us.)
Fee/costs award affirmed in the partially published discussion on the 998 issues.
The silence on fees and costs meant that the “bright-line rule” in Engle v. Copenbarger & Copenbarger, LLP, 157 Cal.App.4th 165, 168 (2007) was triggered, meaning that fees and costs were deserving by plaintiff if the underlying Song-Beverly Warranty statutory scheme so allowed.
The statutory scheme did so allow. The primary issue was whether a judgment was needed or whether a dismissal with prejudice was an acceptable “judgment substitute” before plaintiff was deemed the prevailing party. In light of analogous decisions in the remedial consumer context, a dismissal with prejudice under 998 offers was the equivalent of a judgment, so that--in the end--plaintiff prevailed under the fee-shifting provisions of 998, which were complemented by the consumer protectionist purposes of the Song-Beverly Act for purposes of determining when a “judgment” (or its equivalent) was reached.
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