As predicted, Madrigal vs. Hyundai Motor America was modified and remanded

When I reviewed the decision in Madrigal vs. Hyundai Motor America 2023 DJDAR, 3121, I opined that "Even if the majority is right on its legal conclusion, it is my opinion that it reached the wrong result on the facts. The court overturned the award of costs to the plaintiff, when it should properly have remanded the case back to the original court to determine how much pre- offer cost and fees the plaintiff should have been awarded. ... It is only after such pre- offer costs and fees are determined and then added to the $39,000.00 damages amount, can it be truly known if the plaintiffs' total recovery was more or less than $55,556.70." ("Code of Civil Procedure Sec. 998 cost-shifting applies to settlement agreements," Daily Journal, April 17, 2023, at 7.)

On May 9, the Majority opinion of the Court of Appeal modified the decision, essentially agreeing with this line of reasoning. It reasoned that "The trial court should therefore have applied that statute [CCP 998] when assessing the costs and attorney fees recoverable by the parties. On remand, the trial court may consider the parties arguments regarding the validity of the offer, whether the offer was more favorable than the judgment obtained by plaintiff, and any other arguments that may flow from the application of section 998. Our opinion does not foreclose the parties from advancing any such contentions below. ... The order is reversed and the matter is remanded to the trial court to determine the amount of costs and attorney fees recoverable, consistent with this opinion." 2023 DJDAR 4081.

The Majority Opinion got it right this time, and it may result in an outright victory for the plaintiffs on remand. The difference between the expired 998 and the settlement amount was about $16,000.00. Given that the case was litigated for some months before that 998 offer was made, it is hard to conceive how the plaintiff would not be able to justify attorney fees of $16,000.00. I had further opined in my piece that "if that analysis results in plaintiffs obtaining more than the 998 offer in total, then plaintiffs would be entitled to the rest of their costs and fees post-offer, because they would have achieved a more favorable result than the 998 offer." This is more likely than not going to be the end result of the litigation.

While the plaintiffs in this case may end up dodging the bullet, the opinion still remains a wary trap for litigators and it is still hoped that the Supreme Court will in the near future get to weigh in on the subject.

-- Ogochukwu Victor Onwaeze

Principal of Onwaeze Law Group