Car Manufacturer’s First And Second Offers Were Different, And “Fees On Fees” Are Recoverable For Fee Motion Work Under Lemon Law Fee Shifting Provision.
California’s “lemon law” has a fee-shifting provision in favor of a prevailing consumer buyer. (Civ. Code, § 1794(d).) Actual time is recoverable under this provision, as long as it is reasonably incurred. (Robertson v. Fleetwood Travel Trailers of California, Inc., 144 Cal.App.4th 785, 817-818 (2006).) “Fees on fees”—fees incurred in preparing a motion for fees—are also generally recoverable in a fee award. (Ketchum v. Moses, 24 Cal.4th 1122, 1133 (2001).)
In McKenzie v. Ford Motor Co., Case No. G049772 (4th Dist., Div. 3 June 12, 2015) (unpublished), car buyer filed a “lemon law” complaint against Ford seeking damages/restitution of about $23,000, as well as penalties and an award of fees/costs.
Two law firms represented plaintiff. Ford made an initial CCP § 998 settlement offer for $25,000 in money and either $15,000 in fees or allow plaintiff to move otherwise for reasonable fees, but included suspect terms such that the offer was likely invalid: Ford wanted certain factual admissions, wanted a release of known/unknown claims, and wanted a “material” confidentiality provision. (For a discussion of suspect § 998 terms, see our post of July 2, 2014.) Car buyer countered with an offer for $25,000.01, plus reasonable fees/costs to be determined by the court, in exchange for a return of the car—an offer not accepted. Ford then made a second § 998 offer, knocking the monetary payment down to $25,000, a car return, and either $15,000 in fees or car buyer filing for reasonable fees/costs with the court, with this offer being accepted by car buyer.
Car buyer sought $47,491.25 via motion, as well as routine and other costs. Among other things, the two firms included time incurred in litigating after Ford’s first settlement offer. The trial judge granted the fee request, but awarded only $28,350.08, the exact amount it determined car buyer incurred before the service of Ford’s initial 998 offer, based on the notion that Ford’s second, accepted offer was indistinguishable from its initial offer such that the intervening time was unnecessary. It also found that some of the time by both firms representing plaintiff amounted to “double billing.”
The 4/3 DCA, in a 3-0 decision authored by Justice Rylaarsdam, reversed and remanded for a “re-do.” It found that the two offers by Ford were different such that the intervening fees were properly recoverable. Ford somewhat aided this determination by admitting that its initial offer incorporated numerous “extraneous” provisions, eliminating the non-financial terms in its second offer (especially the “material” confidentiality provision). As far as the duplication of work rationale, the appellate court was skeptical given that Ford only identified 2 of the 42 hours of work as being suspect—rather, the post-offer reduction found faulty drove the wholesale reduction in significant respect. Also, “fees on fees” were properly recoverable. Finally, some of the other costs claimed, but rejected by the lower court, needed to be reexamined as well.