Consumer Statutes, Section 998: Plaintiff Only Suing For Injunctive Relief And Not Proving Damage Liability Under CLRA, Where Accepted 998 Offer Was Silent On Liability, Fees, And Costs, Did Not Give Rise to Fee Recovery

Case Is A Real Attention Getter With Respect to Acceptance Of 998 Offers Which Are Carefully Drafted.

            We like this next case because if offers practitioners on both sides of the aisle an opportunity to carefully craft and accept CCP § 998 offer in certain consumer-oriented areas of the law.  Mikki v. Lifemark Group, Inc., Case No. D076885 (4^th Dist., Div. 1 Jan. 20, 2021) (unpublished) is the opinion we next discuss.

            What happened here is that the plaintiff sued defendant, in a dispute about a cemetery space, for injunctive relief primarily under the Consumers Legal Remedies Act (CLRA) and expressly disclaimed damages in the complaint.  Early on, the defense served, and plaintiff accepted, a CCP § 998 offer to pay her $5,000.01 “exclusive of attorneys’ fees and costs incurred as of the date of this offer,” although nothing in the offer stipulated to liability or acknowledged that plaintiff was the prevailing party.  Plaintiff moved for $67,000 in attorney’s fees under CLRA, but the lower court only ordered the defense to pay $38,000 in fees.  Defendant appealed.

            The defense won a reversal as a matter of law with respect to the fee award.

            Initially, the defense argued that no fee award was justified because plaintiff served no CLRA pre-lawsuit demand.  However, that argument was rejected because it only applies to damages claims, not an injunctive situation which was involved here.

            However, as all opinions must, that brought the appellate court to consider whether plaintiff was a prevailing party under the CLRA.  She was not.  The problem was that the section 998 offer only offered a payment, such that plaintiff did not establish she suffered some tangible damage given that the complaint only sought injunctive relief.  (Cf.  Meyer v. Sprint Spectrum L.P., 45 Cal.4^th 634, 644-645 (2009) [likely the holding; but, if dicta, should be followed here].)  There was no finding of damages liability, which is necessary under the CLRA, Unruh Act, and Disabled Persons Act, and no liability was not conceded under the 998 offer.  That silence was dispositive.  So, the attorney’s fees award went POOF! as a matter of law.