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Prevailing Lemon Law Plaintiffs Entitled to Attorney Fees Generated After Turning Down Settlement Offer

A young business man strained with his damaged car, looking frustrated at the engine failure.

Plaintiffs who are sold a defective vehicle have the right to get their money back. If the automaker or dealership refuses to buy the car back, plaintiffs may be entitled to the purchase price of the vehicle plus additional damages for other harm caused by the defective vehicle. When plaintiffs win a lemon law case, defendants can be on the hook for paying the plaintiffs’ legal fees in addition to the damages owed. A California appeals court recently overturned a trial court’s decision to limit available attorney’s fees to fees generated before the plaintiffs rejected a settlement offer, allowing the plaintiffs to recover substantially more from the automaker defendant. Continue reading for details about the case. If you have been sold a lemon or if you have auto fraud concerns, reach out to a dedicated and knowledgeable California lemon law attorney for help protecting your rights and your safety.

FCA Owes More in Attorneys’ Fees in Lemon Law Settlement

A married couple filed a lawsuit against FCA US LLC, the North American arm of Fiat Chrysler Automobiles. The plaintiffs alleged that they bought a new 2011 Dodge Charger for $52,000 and, after purchase, discovered a number of problems with the vehicle. The problems persisted, and FCA refused to buy the car back from them despite the preexisting problems. The couple filed claims under the Song-Beverly Consumer Warranty Act.

Under the Song-Beverly Act, plaintiffs who prevail in a case are entitled to recover reasonable attorneys’ fees incurred in bringing the claims. Plaintiffs can collect attorney’s fees whether they win at trial or obtain a settlement. In this instance, FCA offered the plaintiffs $81,000 to settle the case in April 2018. The plaintiffs rejected the offer and proceeded to trial. In August 2018, on the second day of trial, the parties settled for $89,500 plus reasonable attorneys’ fees.

The plaintiffs claimed $125,000 in attorneys’ fees. The lion’s share of those fees, nearly $100,000, were generated in the three months after the rejected settlement offer in preparation for trial. The trial court refused to award fees incurred after the April settlement offer, pointing to the sizable difference in fees as compared to the small difference in the ultimate settlement.

On appeal, the court overturned the trial court’s decision. The appeals court stated that it was “an error of law for the trial court to reduce an attorney fee award on the basis of a plaintiff’s failure to settle when the ultimate recovery exceeds” the pretrial settlement, even if only by a little. To rule to the contrary would put undue pressure on plaintiffs and their attorneys to accept a lowball settlement instead of taking a meritorious case to trial.

Trusted Advice and Representation from a Seasoned California Lemon Law Attorney at Nita Lemon Law Firm

If you are experiencing problems with your vehicle, I would like the opportunity to evaluate your lemon law claim at no charge to you and discuss your legal options. For a free, no-obligation consultation, please call me toll-free at 877-921-5256, submit a free case evaluation on my website at www.nitalemonlaw.com, or email me directly at nick@nitalemonlaw.com. Either way, I will personally evaluate your case and promptly respond to your inquiries. I look forward to hearing from you.

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