Horvitz & Levy obtained the reversal of an award exceeding $200,000 in attorney fees and other costs in a decision that affirmed the validity of its client’s section 998 settlement offers in lemon law litigation.
Two months after plaintiff filed a Song-Beverly action, defendant FCA served a Code of Civil Procedure section 998 offer for $51,000 to repurchase plaintiff’s vehicle, plus reasonable attorney fees and costs, in exchange for dismissal of the action. Plaintiff objected to, and did not accept, the section 998 offer. Just before trial fifteen months later, FCA served plaintiff with a section 998 offer for $145,000 (to cover potential penalties as well as a vehicle repurchase) with otherwise identical terms. The jury awarded plaintiff $48,416, an amount less than either section 998 offer, which FCA contended created a bar to plaintiff’s recovery of statutory attorney fees and costs. The trial court sustained plaintiff’s objections to the offers, ruling that neither was a valid section 998 offer.
Horvitz & Levy persuaded the Court of Appeal to reverse the attorney fees and costs award in a published decision. The court held that plaintiff’s numerous objections to the form of the offers were meritless, as was plaintiff’s position that section 998 has no effect in lemon law cases even if plaintiff’s eventual recovery falls below the amount of a settlement offer that otherwise complies with section 998.