Plaintiff Was Unable to Collect Arbitration Award For Violations Of The Consumers Legal Remedies Act, Leading Her To Successfully Seek Summary Judgment Against Surety Under Veh. Code Section 11711 For Dealership’s Fraudulent Representation
In Gonzalez v. Hudson Insurance Co., Case Nos. D080166/D081686 (4th Dist., Div. 1 February 13, 2024) (unpublished), auto dealer sold a car to plaintiff and falsely represented to her that the car had been in no accidents, had not sustained prior collision damage, and had no frame damage. When Plaintiff became aware that auto dealer’s representations were fraudulent, she sued for violations of the Consumers Legal Remedies Act, among other causes of action, and received an arbitration award against the auto dealer for each of her causes of action, including the fraud-based violations of the CLRA.
Plaintiff was unable to collect from the dealership – leading her to successfully seek summary judgment against the dealership’s bond surety under Veh. Code § 11711. Plaintiff then moved for attorney’s fees and costs against bond surety – arguing that fees were mandatory under the CLRA because she had prevailed on her CLRA cause of action, and the bond surety’s liability was in line with the dealership’s liability. The trial court agreed, and ordered a $264,440 fee award to Plaintiff, with $120,581 of the award from arbitration-related fees and the balance from post-arbitration fees with a 0.5 multiplier.
Bond surety appealed both the summary judgment grant and the fees award, but provided no legal analysis and citation to the record to support its claim that the trial court erred in finding it liable on the bond/granting summary judgment – resulting in the 4/1 DCA affirming the summary judgment.
As to the fees order, bond surety argued that section 11711 does not authorize a fees award, that the combined liability for damages and attorney’s fees exceeded the amount of the bond it issued the dealership, and that the trial court abused its discretion in calculating the fees award because it applied a 0.5 multiplier to the lodestar for the post-arbitration fees.
The appellate panel was not persuaded. Following the holdings in Harris v. Northwestern National Ins. Co. (1992) 6 Cal.App.4th 1061, Pierce v. Western Surety Co. (2012) 207 Cal.App.4th 83, and Karton v. Ari Design & Construction, Inc. (2021) 61 Cal.App.5th 734, the 4/1 DCA affirmed. First, the fees were awarded under the CLRA, not section 11711, and as the prevailing plaintiff under the CLRA’s mandatory fee provision, Plaintiff was entitled to recover her attorney’s fees from the dealership as an item of costs. Under Civ. Code § 2808, the liability of a surety is commensurate with that of the principal, meaning where the dealership was liable for fees as an item of costs based on conduct secured by the bond, so too was the surety – even where the award exceeds the amount of the bond. As to the trial court’s application of the 0.5 multiplier, the panel found no abuse of discretion.
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