California Appeals Court Reverses Award of Attorney Fees in Lemon Law Trial

January 31, 2022 – Press Release

January 31, 2022 (Los Angeles, CA) – Hawkins Parnell & Young obtained a favorable ruling for FCA in an automotive warranty case before the California Court of Appeal, Second Appellate District. In the published order, a three-judge panel affirmed the position argued by Hawkins Parnell that CCP § 998 offers are valid in lemon law litigation and can operate to bar recovery of attorney fees and costs.

This case arose when the plaintiff sued FCA for claims under the Song-Beverly Consumer Warranty Act and fraudulent concealment. FCA served a 998 offer for $51,000 plus reasonable attorney fees and costs early in the litigation. After the plaintiff rejected the offer, FCA made a second 998 offer for $145,000, plus reasonable attorney fees and costs.

After the plaintiff denied both 998 offers, Hawkins Parnell tried the case to verdict on behalf of FCA. The jury returned a defense verdict for FCA on the fraudulent concealment claim and awarded the plaintiff $48,416 for the Song-Beverly issues, less than both prior 998 offers. On the plaintiff’s motion for attorney’s fees and costs, the trial court determined that neither 998 offered barred recovery of attorney’s fees and awarded over $200,000.

On appeal, the California Court of Appeal agreed with FCA and reversed the award for attorney fees and costs. This opinion has significant implications that benefit all manufacturers who defend cases involving the California Song-Beverly Consumer Warranty Act. Because of this decision, the plaintiff’s counsel now ignored valid 998 offers at their peril.

Barry Schirm and Ryan Marden of the Los Angeles office of Hawkins Parnell represented FCA.