Court Opinion

ID: 4588169
Source: CourtListenerOpinion
Date Created: 2020-11-19 22:01:53.103322+00
Date Added: 2024-06-11T13:50:43.310134
License: Public Domain

Filed 11/19/20 Regueiro v. FCA US, LLC CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION ONE

 FRANCISCO REGUEIRO, et al.,                                       B301772

           Plaintiffs and Respondents,                             (Los Angeles County
                                                                   Super. Ct. No. BC620823)
           v.

 FCA US, LLC,

           Defendant and Appellant.

      APPEAL from an order of the Superior Court of Los
Angeles County, Dennis J. Landin, Judge. Affirmed.
      Hawkins Parnell & Young and Ryan K. Marden for
Defendant and Appellant.
      Knight Law Group, Steve Mikhov, Roger Kirnos, Amy
Morse; Wirtz Law, Richard M. Wirtz; Greines, Martin, Stein &
Richland, Cynthia E. Tobisman and Marc J. Poster for Plaintiffs
and Respondents.
                   _______________________
       Defendant FCA US, LLC (FCA) appeals the trial court’s
award of attorney fees to the prevailing plaintiffs in their action
under the Song-Beverly Consumer Warranty Act (Song-Beverly
Act), pursuant to Civil Code section 1794, subdivision (d). FCA
contends the trial court erred by awarding attorney fees incurred
by the plaintiffs after FCA made its initial settlement offer,
because this initial offer was greater than the amount ultimately
recovered by the plaintiffs at trial. We have jurisdiction under
Code of Civil Procedure section 904.1, subdivision (a)(1). We
affirm.
                        BACKGROUND
       On or around September 17, 2011, plaintiffs Francisco and
Elizabeth Regueiro purchased a new 2011 Jeep Grand Cherokee
manufactured by FCA from Cerritos Dodge, Inc., a local
automotive dealer. Subsequent to this purchase, the Regueiros
experienced problems with the vehicle that they attributed to
defects in the power module with which the vehicle was equipped.
       On May 18, 2016, the Regueiros filed this action against
FCA. The complaint alleged theories of (a) breach of express
warranty in violation of the Song-Beverly Act, (b) breach of
implied warranty in violation of the Song-Beverly Act, and
(c) fraudulent inducement/concealment. The case was tried, and
on April 5, 2019, the jury returned a verdict of $25,586.90 in
favor of the Regueiros based on the implied warranty claim. The
jury returned defense verdicts on the express warranty and fraud
claims.
       During the pendency of the litigation, FCA served three
successive offers to compromise under section 998 of the Code of
Civil Procedure (section 998). The first, dated June 13, 2016,
offered the Regueiros $50,000 in exchange for dismissal of the

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action with prejudice and the return of the vehicle. On
October 25, 2017, FCA made a second offer increasing the
amount offered to $92,695. On May 25, 2018, FCA served a third
offer with a proposed settlement amount of $141,000.
       Following the jury verdict, counsel for the Regueiros filed a
motion for attorney fees under the Song-Beverly Act, citing Civil
Code section 1794, subdivision (d). The request was for
$362,467.50 in base fees along with a “lodestar” enhancement of
$181,233.75, for a total of $543,701.25.
       FCA opposed the Regueiros’ fee request on several grounds.
Of relevance to this appeal, it argued that attorney fees accrued
by the Regueiros after the initial section 998 offer were not
“reasonably incurred” within the meaning of Civil Code section
1794, subdivision (d).
       In a written ruling, the trial court concluded that section
998 applied to the Regueiros’ recovery of costs in the action. The
trial court found the initial June 13, 2016, section 998 offer by
FCA was valid and operative. Applying section 998 to the case,
the trial court found the plaintiffs’ verdict of $25,586.90 was less
favorable than the $50,000 offered by FCA. Accordingly, the trial
court found the Regueiros were not entitled to recover their costs
incurred after June 13, 2016, by reason of section 998. This
portion of the trial court’s ruling is not challenged on appeal.
       The trial court applied the Song-Beverly Act to award
attorney fees of $83,000 to the Regueiros, employing the lodestar
approach to determine the amount of fees reasonably incurred.
       This appeal followed.
                          DISCUSSION
      FCA does not contest the application of the Song-Beverly
Act’s attorney fees provision, but notes the Act limits recovery to

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the fees reasonably incurred. (Civ. Code, § 1794, subd. (d).1) It
raises a limited issue on appeal, arguing that the trial court
abused its discretion by awarding attorney fees incurred after the
Regueiros rejected FCA’s June 13, 2016, section 998 offer. 2
      We review an award of attorney fees under the Song-
Beverly Act for abuse of discretion, applying a presumption that
the trial court’s award of attorney fees is correct. (Etcheson v.
FCA US LLC (2018) 30 Cal.App.5th 831, 840.)
      In its ruling on the request for attorney fees, the trial court
noted that the bulk of the case had to do with efforts to prove the
cause of certain defects, the fraud cause of action, and the claim
for punitive damages, all of which were resolved in favor of FCA.
The trial court accordingly computed what it considered
reasonable time and hourly rates associated with the implied
warranty claim on which the Regueiros were successful. The
court awarded $27,000 for trial time and $56,000 for pretrial and
posttrial motion practice, for a total of $83,000. In doing so, the
court reasoned that it was “clear that this case went to trial

      1 CivilCode section 1794, subdivision (d), provides: “If the
buyer prevails in an action under this section, the buyer shall be
allowed by the court to recover as part of the judgment a sum
equal to the aggregate amount of costs and expenses, including
attorney’s fees based on actual time expended, determined by the
court to have been reasonably incurred by the buyer in
connection with the commencement and prosecution of such
action.”
      2 On appeal, the Regueiros contend the record designated
by FCA is inadequate. On our review of the notice designating
the record on appeal, we determined that the Clerk’s Transcript
did not include all of the documents that were designated, and
ordered the record augmented with the missing documents.

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based on plaintiffs’ belief that they would prevail on the Song-
Beverly cause of action, for which civil penalties are available.”
The trial court reached this conclusion because the Regueiros
“rejected offers that would have compensated them for the
damages that could have been reasonably obtained for the
implied warranty” claim.
       The trial court did not specifically state its reasons for
failing to limit the award of attorney fees to those fees incurred
prior to the initial section 998 offer. Nonetheless, its ruling
clearly shows the court was aware of the impact of the Regueiros’
rejection of the section 998 offers on its award of costs. In
considering the request for attorney fees, the trial court
recognized the Regueiros pressed forward to trial despite the
section 998 offers because they believed they would prevail and
obtain civil penalties. Therefore, to the extent FCA contends the
trial court failed to consider the impact of the section 998 offer in
awarding attorney fees, the record does not support its position.
       FCA also argues the trial court erred by failing to limit the
fee award to the fees incurred as of the time of its initial section
998 offer. We do not agree. The case law examining this issue
has failed to adopt such a bright line rule, and instead indicates
that a trial court must consider all the circumstances of the
individual case to determine if the plaintiff acted reasonably in
pursuing litigation after rejecting a section 998 settlement offer.
(See Goglin v. BMW of North America, LLC (2016) 4 Cal.App.5th
462, 471 [affirming award of fees incurred after the plaintiff’s
reasonable rejection of § 998 offer]; see also Etcheson v. FCA US
LLC, supra, 30 Cal.App.5th at p. 840 [reversing fee award that
was limited to fees incurred up to tender of a § 998 offer, where
the plaintiff acted reasonably in rejecting the offer]; McKenzie v.

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Ford Motor Co. (2015) 238 Cal.App.4th 695, 708 [reversing denial
of fees incurred following rejection of § 998 offer, where the
plaintiff acted reasonably in rejecting the offer].) The cases do
not say that a trial court cannot take the section 998 history into
account as part of its analysis of the fees “reasonably incurred.”
However, the statutory language of section 998 does not on its
face mandate the cessation of fees in the same manner as costs,
and FCA has directed us to no authority specifically applying
section 998 in this manner.
       The trial court’s failure to cut off all fee recovery as of the
date of the first section 998 offer by FCA was not error, and the
fees awarded do not represent an abuse of discretion.
                          DISPOSITION
     The order awarding attorney fees to plaintiffs is affirmed.
The Regueiros shall recover their costs on appeal.
     NOT TO BE PUBLISHED

                                            FEDERMAN, J.

We concur:

             ROTHSCHILD, P. J.              CHANEY, J.

      Judge of the San Luis Obispo County Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.

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