ENHANCED ATTORNEYS’ FEES: SOMETHING TO PONDER
As many of you know, one of my specialties is mediating lemon law cases, (i.e. Song-Beverly Consumer Warranty Act, California Civil Code §1790 et seq). Recently, a division of the Fifth Appellate District of the California Court of Appeal issued a decision which attorneys representing consumers will applaud while attorneys representing manufacturers and dealerships will dislike.
In Robertson v. Fleetwood Travel Trailers of California, Inc., (Case No. F048123) 2006 Cal. App. Lexis 1755 (November 7, 2006), the appellate court held, among other things, that the trial court was authorized to use a multiplier in awarding fees under the attorneys’ fees provisions of California’s Song-Beverly Act. The trial court enhanced the actual fees of $145,080.00 by a multiplier of .50 for a subtotal of $217,620.75 plus awarded an additional $13,566.70 in fees incurred on the motion for attorneys’ fees, for a grand total of $231,187.45. The appellate court did remand the case to the trial court to recalculate the fees based on some errors perceived by the appellate court.
The facts of the case are straightforward. In July 2002, Lorna and Francis Robertson purchased from Visalia RV Sales and Service (“Visalia”) a new 39 – foot wilderness travel trailer (“Trailer”) manufactured by Fleetwood. They purchased it as a temporary home for Mr. Robertson to live in while working in California. They were permanent residents of Utah. The home was towed to a nearby trailer park. Over the next approximately fifteen (15) months, Mrs. Robertson (during her visits to California) complained to the dealer (Visalia) of a shower leak. On several occasions, the dealer sent a technician out to repair it. But it was not repaired. Finally in October 2006, she discovered the source of the leak: the P-trap was completely severed from the drain. But by then, there was also extensive water damage to the trailer: when the underside of the trailer was cut open, approximately 100 – 150 gallons of water poured out over several days.
Because of the extensive water damage, the Robinsons requested Fleetwood to repurchase the trailer under California Civil Code §1793.2(d). When Fleetwood would not readily agree, the Robinsons sued. The jury found in favor of the Robinsons, awarding them $22,000 for repurchase of the trailer, $16,000 as a civil penalty against Fleetwood for its willful failure to comply with its obligations (California Civil Code §1794) and $231,187.45 in attorneys’ fees.
As a mediator, I always encourage the parties to keep control of and to settle their disputes and not leave it to a court and/or jury to decide the matter for them. This case is a good example of what can happen when the parties allow others to determine their dispute. Notably, the repurchase price of the trailer was $22,000. Yet, Fleetwood was also required to pay a civil penalty of $16,000 for its “willful failure” to comply with its obligations under the statutes, and $231,187.45 in attorneys’ fees. The attorneys’ fees awarded are more than ten (10) times the cost to repurchase the trailer. Surely, this matter could have been mediated to a resolution that would have required far less in payment than what the jury awarded. . . and without all of the adverse publicity.
So, during your next mediation, when you are weighing whether to settle, consider that the cost of putting your fate into the hands of strangers may be far more than you can ever imagine.
. . . Just something to think about.
