However, Plaintiff Was Entitled To Routine Costs As “Net Monetary Judgment” Prevailing Party.
For all consumer attorneys, the next case should be of interest as far as what attorney’s fees can be awarded under the Song-Beverly Act where confidential settlements are involved and what standard governs the award of fees to the statutory “prevailing party.”
Garcia v. Mercedes-Benz USA, LLC, Case No. B279897 (2d Dist., Div. 2 Apr. 5, 2018) (published) is an interesting situation under the Song-Beverly Act involving a confidential settlement between a car manufacturer and plaintiff consumer even though the dealer was not involved, even the settlement did involve compensation for dealer add-ons. What basically happened was that manufacturer agreed, before a complaint was filed, to car purchaser’s primary relief to “repurchase” the car, compensate for dealer add-ons, and some attorney’s fees. This was rejected, but the manufacturer and consumer—who did not sue the dealer—did reach a confidential settlement (important as we shall explain later), the terms of which was were not disclosed before the trial judge—but with consumer filing to recover $8,430 in fees and $750 in costs under the Song-Beverly Act, which is pro-consumer in nature. The trial judge denied both the fee and costs request.
The 2/2 DCA affirmed the denial of the fee request, but reversed the refusal to award routine costs to consumer. The focus of the appeal, of course, was on the fee denial.
On the fee request, the appellate court acknowledged there was a split of thinking on how to define “prevailing party” under the Song-Beverly Act fee-shifting provision. Some had said it should follow the CCP § 1032 routine costs definition of “net monetary recovery” for a prevailing party, while other had said there was a more nuanced “pragmatic” analysis focusing on what side truly achieved litigation objectives. The Garcia court sided with the more pragmatic approach, then proceeded to determine if the lower court abused its discretion in deciding that consumer did not “prevail.” Given that the manufacturer was not liable for dealer add-ons, that led the appellate court to agree that consumer did not meet her primary litigation objectives given she got a settlement (presumably for add-ons), no civil penalty, and only reserved attorney’s fees for a later date.
Different result on costs. The trial judge erroneously denied costs of $750 to consumer because he did not believe a costs memorandum was filed. However, it was filed, so costs should have been awarded to plaintiff. By the way, the appellate court decided each side should bear their own costs on appeal.
BLOG OBSERVATION—Although confidential settlements are allowed under the Song-Beverly Act, there is reasoning in this case suggesting that without disclosure of the settlement terms, a trial judge could conclude that the “prevailing party” forfeited a right to fees. Beware!