Fourth District, Division 2 Reminds Fee-Shifting Plaintiffs To Not Eschew Early Compromise Proposals.
The next case reminds all of us that the system is geared for resolution—resolution being another word for settlement early on in the game, under the right circumstances, under the right case, and under reasonable efforts to resolve the matter.
Miss Rose Cade , who has also been nominated “Southern California’s Swat the Jinx Girl”– Queen of the Lemons. February 13, 1920. Library of Congress
Lemon law attorneys representing plaintiff apparently rejected an early settlement offer that offered to restore the status quo and pay fees as determined by the court. Plaintiff did not accept the offer and then moved for substantial fees. Guess what happened at the trial and appellate court levels? Answer: Read on, especially if you want to be tough and unyielding—and you may not like the result.
In Lopez-Bradley v. Hyundai Motor America, Case No. E045233 (4th Dist., Div. 2 May 7, 2009) (unpublished), plaintiff sued under California’s Lemon Law to repair, replace, or rectify problems relating to a 2003 Hyundai Elantra in the wake of mechanical problems occurring after 27,000 miles. Defendant manufacturer offered to replace the car with a comparably equipped 2006 model with a statutory mileage reduction for prior use of the car or offer a reimbursement deal along similar lines. Plaintiff rejected the informal offers, and made no counteroffer. The case eventually settled for $11,000, although plaintiff reserved the right to move for attorney’s fees under Lemon Law fee-shifting statutes.
Plaintiff predictably sought fees of $56,880 for 65.8 hours of attorney time billed at rates ranging from $400-500 per hour—keeping in mind the settlement was $11,000.
The trial court awarded fees in the amount of $3,600, finding that the reasonable amount of attorney time to resolve the dispute was no more than 12 hours at a rate of $330 per hour. In pragmatic fashion, the lower court found that most of the time expended on the case occurred after defendant made reasonable offers to settle and that most expenses would have been avoided had plaintiff’s counsel engaged in good faith negotiation.
The Fourth District, Division 2 issued a tentative decision by which it proposed to affirm the judgment. (BLOG OBSERVATION—This one division of the Fourth District issues tentative decisions before argument for guidance of the parties. No other intermediate appellate courts have this protocol.) Plaintiff then moved to dismiss the appeal, which was granted by the appellate court.
BLOG UNDERVIEW—The lesson from this case is pretty evident: try to work out a problem with the opponent; if you refuse reasonable offers to settle, you will not get much sympathy from courts along the way.