The Trial Court Improperly Cut Off Fees Incurred After Plaintiffs’ Rejection Of The § 998 Offer Instead Of Engaging In A Lodestar Analysis Of The Entire Case Pursuant to Civil Code § 1794(d).
In Reck v. FCA US LLC, Case No. A157966 (1st Dist., Div. 1 May 24, 2021) (published), the trial court awarded attorney fees of only $30,237 ($20,158 lodestar with a .5 multiplier) out of a requested $187,247 ($124,831 lodestar with a .5 multiplier) to Song-Beverly plaintiffs. The trial court determined the reduction was appropriate because plaintiffs beat defendant’s pretrial Code of Civil Procedure § 998 offer by only $8,500 during a mandatory settlement conference two days after trial began, and had incurred almost $100,000 in fees between the time they rejected the § 998 offer and ultimately settled. The trial court also excluded fees incurred by plaintiffs for two unsuccessful motions. Plaintiffs appealed.
The 1/1 DCA reversed and remanded – finding the trial court abused its discretion by failing to base its award – pursuant to the Song-Beverly Act (California’s Lemon Law) – on “actual time expended” for hours that were “reasonably incurred.” (Civil Code § 1794(d).) The trial court improperly cut off all attorney fees incurred after plaintiffs’ rejection of the § 998 offer instead of properly engaging in a lodestar analysis of the entire case – one where the final settlement represented more than a 10% increase over the § 998 offer and also resulted in a .5 multiplier being added to plaintiffs’ recovery.
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