Language in Defendant’s 998 Offer Was Ambiguous And Did Not Allocate Any Portion Of Payment To Any Cause Of Action Other Than The Song-Beverly Claim.
Miss Rose Cade – Queen of the Lemons – 1919 or 1920
In Smart v. Ford Motor Company, Case No. C087422 (3d Dist., January 21, 2020) (unpublished), lemon law Plaintiffs filed an action against Ford alleging four fraud claims, violation of the CLRA, and a claim under the Song-Beverly Act. Ultimately, Plaintiffs accepted Ford’s fifth 998 offer which provided a $55,083.09 buy-back of their Ford truck and $192,416.91 in incidental/consequential damages and a two-time penalty under the Song-Beverly Act. The settlement also provided that Ford would pay Plaintiffs’ attorneys’ fees and costs either in the amount of $5,000 or an amount determined by the trial court on noticed motion.
When Plaintiffs moved for $147,207.50 in fees and costs, Ford opposed – claiming that only fees allocated to the Song-Beverly Act claim could be awarded. To this end, Ford claimed that the maximum Song-Beverly damages in this case were $147,493.48 – meaning 40.4% of the settlement was recovered under the fraud causes of action. The trial court bought this reasoning and reduced Plaintiffs’ fee request by 40.4%, plus other reductions to Plaintiffs’ attorneys’ hourly rates and for appearances that could have been handled by phone – awarding Plaintiffs $46,631.78.
Plaintiffs appealed, and the Third District reversed. While the Third District found no abuse of discretion in the trial court’s reduction to the attorneys’ hourly rates, it found the trial court had erred by reducing Plaintiffs’ request by 40.4%. A review of the 998 offer showed that the items for which payment was to be made were only identified as being recoverable under the Song-Beverly Act. There was no mention of payment for any item under Plaintiffs’ fraud causes of action.
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