Dismissal of CCP 998-settled case where agreement silent on plaintiff's statutory claim of attorney fees does not preclude award
Does a dismissal with prejudice after a case settles under California Code of Civil Procedure section 998 preclude an award of attorney fees because the case did not proceed to "judgment?" This is the principal question raised in the Court of Appeal, Fifth Appellate District, case of Wohlgemuth v. Caterpillar, Inc. (filed July 23, 2012, F061981). The short answer is no.
The plaintiffs purchased a new motor home, the engine of which was manufactured and warranted by defendant. After there had been numerous attempts by defendant to repair what plaintiffs claimed were engine defects, plaintiffs sued under the Song-Beverly Warranty Act (Civil Code section 1790 et seq.), which entitles a prevailing consumer to attorney fees and costs in addition to damages.
Shortly before trial, defendant made a "998" offer to compromise by paying plaintiff $50,000 in exchange for a dismissal with prejudice and standard release of all claims. Plaintiffs accepted the offer, which was silent on attorney fees and costs, dismissed the action and then moved to recover their attorney fees and costs under Civil Code section 1794, subdivision (d). Defendant opposed the motion. The trial court granted the motion awarding $117,625 in attorney fees and $7,737 in costs.
Case law is clear that where a CCP 998 offer is silent on costs and fees, the prevailing party is entitled to costs and, if authorized by statute or contract, attorney fees." (Engle v. Copenbarger & Copenbarger, LLP (2007) 157 Cal.App.4th 165, 168.) Defendant's primary argument both in the trial court and on appeal was plaintiffs could not recover attorney fees and costs because there was no judgment entered in plaintiff's favor. This argument cites the language of 1794(d): a buyer who prevails in any action under the Song-Beverly Act is entitled to recover attorney fees and costs "as part of the judgment."