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Attorneys’ Fees for Lemon Law Plaintiffs Limited After 998 Offer

2007 | Topic: Warranty

In Duale v.Mercedes-Benz USA, LLC (Feb. 15, 2007), the California Third District Court of Appeal extended to cases brought under the Song Beverly Consumer Warranty Act the rule that a party cannot recover fees and costs where the party does not obtain a more favorable verdict than the offer that was made under the statutory offer to compromise under California Code of Civil Procedure § 998. 

Instead, the Court held that car buyers who prevailed in a lemon law suit could recover only pre-offer attorneys’ fees and costs where the manufacturer's statutory offer of compromise exceeded the damage award.  Plaintiffs initially sought return of the sum paid for the car, plus interest from the date of purchase, treble damages, attorneys’ fees, and costs.  Defendant served plaintiff with a statutory offer to compromise in which it offered to settle the case by taking back the car in exchange for $51,466 plus plaintiffs’ reasonably incurred attorneys’ fees and court costs incurred to date.  Plaintiffs refused the offer. At trial, the jury awarded plaintiffs $49,885. The Court held that plaintiffs were only entitled to recover those fees and costs incurred before the statutory offer was made, but declined to award the buyers post-offer attorneys’ fees and costs.