Wow–Fee Entitlement Can Be Had, If You Are Tenacious And Can Get to the Right Independent Basis!
The Fifth District’s decision in Pierce v. Western Surety Co., Case No. F062096 (5th Dist. June 22, 2012) (published) goes to show you that the fee entitlement race sometimes goes to the tenacious. All you need is one correct, separate basis for fee entitlement, even if you lose other grounds.
Tenacious. Charles Livingston Bull, artist. Library of Congress.
In this one, plaintiff consumer purchased a truck from a motor vehicle retailer that apparently failed to disclose material prior wreck damage. Retailer went out of business, but consumer made a claim on a bond posted by a surety under Vehicle Code setion 11710, which allows a consumer suffering a loss by reason of the dealer’s fraud to go against a bond in an amount to not exceed the value of the purchased vehicle. After surety accepted a CCP § 998 offer of $10,000, the parties went to the main battle–because attorney’s fees and costs were excluded from the accepted offer.
The lower court did award attorney’s fees in favor of consumer and against surety, prompting surety’s appeal.
Surety argued that Vehicle Code section 11710 was silent on fee recovery, so it could not sustain the award. You are right, Mr. Surety, on this ground.
Surety next argued that the retail sales contract between consumer and dealer, although containing a fees clause, did not allow a fee recovery as a mattter of surety law because consumer was suing for fraud, something not covered by the bond. You are right again, Mr. Surety, fraud claims were not covered, only contract claims not involved here.
However, here is the rub. Consumer did seek fees under various consumer statutes. Consumer sought breach of warranty recovery via the Song-Beverly Consumer Warranty Act, but this did not work given that the fee recovery here was based on fraud. No fee recovery could be based on the Automobile Sales Finance Act because the fee shifting provision is contractually-grounded, not fraud based as was the case here.
But, but. Consumer sued for fraudulent representations under the Consumer Legal Remedies Act, which has a fee shifting provision. Lo and behold, this one was the correct fee entitlement ground. The CLRA fraud-based violation fell within the conduct secured by the section 1171 bond, so the surety was liable. Because fees was an item of costs, it was not capped by the section 11711 $50,000 cap on damages. Judgment affirmed. Tenacity paid off in this particular situation.