Chen v. BMW of North America

Filed 12/29/22; certified for publication 1/23/23 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

DANIEL ZHIHUI CHEN, H048257, H048444 (Santa Clara County Plaintiff and Appellant, Super. Ct. No. CV295858)

v.

BMW OF NORTH AMERICA, LLC,

Defendant and Respondent.

Plaintiff Daniel Chen appeals the trial court’s order awarding him $53,509.51 in attorney fees and costs in his lawsuit against BMW of North America. He contends the trial court should have awarded additional attorney fees accrued after BMW’s statutory offer to compromise under Code of Civil Procedure section 998. We conclude BMW’s offer complied with the statutory requirements and that Chen did not achieve a result more favorable than its terms. The statute therefore disallowed recovery of attorney fees and costs accrued after the offer was made. We will affirm the trial court’s fee award. I. BACKGROUND Chen sued BMW of North America for breach of warranty and for violating the Song-Beverly Consumer Warranty Act (Civ. Code, § 1790, et seq.) and the Consumers Legal Remedies Act (Civ. Code, § 1750, et seq.). He alleged a new BMW he bought in 2011 had various engine defects and the problems were not repaired after a reasonable number of attempts. He sought compensatory damages, restitution, statutory penalties, and injunctive relief.

Chen commenced his lawsuit in June 2016. BMW answered the complaint and generally denied all allegations. After the suit had been pending for about a year, BMW extended an offer to compromise under Code of Civil Procedure section 998. (Undesignated statutory references are to this code.) The offer, in its entirety, was: “Defendants BMW of North America, LLC and BMW of Mountain View (collectively “BMW defendants”) hereby offer, pursuant to Code of Civil Procedure Section 998, to have judgment entered against them, jointly and severally, and in favor of plaintiff Daniel Zhihui Chen in the total sum of one hundred sixty-thousand dollars ($160,000), which amount is exclusive of recoverable costs and attorney’s fees accrued as of the date this offer is made. [¶] BMW of North America, LLC shall also pay the amount of Plaintiff’s reasonable attorney’s fees and costs in this litigation, in an amount determined by the Court following a properly noticed motion by Plaintiff. [¶] Plaintiff shall return the Subject Vehicle to BMW of North America, LLC, along with clear title. [¶] If such an offer is not accepted prior to trial or within 30 days after it is made, whichever occurs first, it shall be deemed withdrawn. If BMW Defendants’ offer is not accepted before withdrawal, and Plaintiff fails to obtain a more favorable judgment, BMW Defendants will seek costs and reasonable expert fees to the full extent permitted by law.” (Capitalization omitted.) Chen did not accept the offer. Instead, his counsel responded with a letter asserting the offer was not valid because it was “fatally vague and uncertain.” (Capitalization omitted.) The litigation continued for another two years. The parties settled on the day of trial. The terms of the settlement were essentially identical to the section 998 offer: BMW would pay Chen $160,000; Chen would return the car; and Chen’s attorney’s fees, costs, and expenses would be determined by the court through a noticed motion. Chen moved as a prevailing party for attorney fees and costs in the amount of $436,071.82. The trial court granted the motion but awarded only $53,509.51. The court 2