Given Substantial Reduction In Lodestar Request, De Novo Review Resulted In A Reversal.
We can definitely tell you that there has been a surge in published and unpublished decisions on the proper standards to be employed in awarding fees under the Song-Beverly Act, commonly known as California’s Lemon Law. The next unpublished decision joins the ranks.
In Palombi v. Chrysler Group LLC, Case No. A156166 (1st Dist., Div. 3 May 20, 2020) (unpublished), plaintiff buying a $25,749 Dodge Avenger had engine/transmission problems that apparently could not be solved, taking her vehicle to an authorized repair facility 11 times over a 16 month period of time. She finally filed suit under the Lemon Law against the car distributor, which shortly resulted in an informal offer to make restitution of the purchase price and other items as well as asking for “a fully executed Release for all defendants.” After discovery was ongoing, defendant served four CCP § 998 offers (some of which had ambiguous release and other terms), with plaintiff accepting the fourth offer by which she would be paid $75,000 and reasonable costs, expenses, and attorney’s fees under the Lemon Law (by stipulation or by court-determined motion) in exchange for a case dismissal with prejudice.
Plaintiff moved for $163,205.60, $19,445.60 in costs, and $95,840 in fees (plus a 1.5 multiplier on the lodestar fee request). The defense principally argued that the initial informal offer to settle for around $25,000 made further litigation efforts unproductive. The trial judge bought it hook, line, and sinker, only awarding $1,750 in fees and $471.95 in costs for an aggregate of $2,221.95.
The 1/3 DCA panel reversed.
Based on the substantial lodestar fee reduction, the appellate court independently reviewed whether the proper legal principles were followed with respect to the fee award—and they were not. The defense position ignored these key points: (1) plaintiff obtained almost a tripling in value over the prior defense offers as far as an actual recovery (from $25,000 to $75,000), hardly limited success under the circumstances; (2) plaintiff was within her rights to reject settlement offers that had unfavorable or vague terms (such as undefined releases or undefined vehicle condition return language such as “undamaged condition (save normal wear and tear)”); and (3) plaintiff did “prevail” within the Lemon Law fee-shifting language, with no obligation to prove that she would have won on the civil penalties issue.
Here is a close-to-concluding language by the appellate court: “[Defendant] essentially urges that we adopt a rule requiring that a buyer must abandon a claim to civil penalties when the vendor offers restitution of the original purchase price. We decline to do so. Such a rule is particularly inappropriate where, as here, the vendor’s settlement offer features the unfavorable and invalid terms outlined above.” (Slip Op., p. 13.)
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