Benson v. Southern California Auto Sales, Inc.
239 Cal. App. 4th 1198
| Cal. Ct. App. | 2015Background
- Benson bought a used Infiniti from Southern California Auto Sales, Inc. (SCAS) and later alleged defects (damaged frame) and deceptive sale terms (price and down payment misstatements).
- Benson’s counsel sent CLRA notice letters on December 10, 2012 demanding rescission, refunds, penalties, and settlement; Benson filed suit before the 30-day CLRA response period expired.
- On January 9, 2013, SCAS responded denying liability but offered rescission: return vehicle, refund payments, satisfy the finance debt, $2,500 for incidental/attorney fees, mileage waiver, and a mutual release.
- Benson rejected and sought a larger recovery; litigation proceeded and the parties later settled with a stipulated judgment for $34,500 and mutual releases; the settlement preserved the defendants’ right to contest a fee motion based on the prelitigation CLRA offer.
- Benson moved for CLRA attorney fees/costs (~$182,000); the trial court denied the motion, concluding SCAS’s January 9 offer was an "appropriate correction" under Civil Code §1782(b) and thus Benson could not maintain a CLRA damages action or recover fees.
- The Court of Appeal affirmed: trial court did not abuse its discretion in finding the offer appropriate, and CLRA fees are not available when a timely appropriate correction was offered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was SCAS’s January 9 response an "appropriate correction" under CLRA §1782(b)? | Benson: the offer was improper because it required a global settlement/release of all claims, not just CLRA correction. | SCAS: the offer effectively rescinded the transaction and provided restitution, so it satisfied §1782(b). | Court: trial court did not abuse discretion; offer was appropriate because it provided the CLRA remedies and other claims were intertwined. |
| Does an "appropriate correction" preclude recovery of CLRA attorney fees and costs under §1780(e)? | Benson: fees promote consumer protection and should be awarded to prevailing consumers even if a correction was offered. | SCAS: if the CLRA damages remedy is barred by a timely appropriate correction, plaintiff cannot recover fees for that defective damages action. | Court: fees/costs are not recoverable where a timely appropriate correction bars a damages action under §1782(b). |
| Whether non-CLRA claims in the suit invalidate the correction offer by adding independent value? | Benson: surrendering other claims shows the correction was not limited to CLRA and thus not appropriate. | SCAS: other claims were inextricably intertwined and added little independent value beyond CLRA remedies. | Court: other claims did not add meaningful independent value; treating all claims together was reasonable. |
| Does a settlement judgment proving payment mean the pre-suit correction was inappropriate? | Benson: the settlement/judgment awarding money demonstrates he was entitled to damages, so the correction offer must have been inadequate. | SCAS: the judgment was a settlement, not a merits determination; the correction offer remained appropriate. | Court: settlement payment does not show the offer was inappropriate; judgment was by settlement, not admission of liability. |
Key Cases Cited
- Morgan v. AT&T Wireless Servs., Inc., 177 Cal.App.4th 1235 (CLRA notice/response purpose and precomplaint settlement intent)
- Outboard Marine Corp. v. Superior Court, 52 Cal.App.3d 30 (CLRA facilitates precomplaint settlements)
- Haraguchi v. Superior Court, 43 Cal.4th 706 (trial court familiarity supports discretionary factual determinations)
- Corbett v. Hayward Dodge, Inc., 119 Cal.App.4th 915 (abuse of discretion review for attorney-fee rulings)
- Leatherman Tool Group, Inc. v. Colgan, 135 Cal.App.4th 663 (limitations on remedies and effect on damages/restitution analysis)
- Tavaglione v. Billings, 4 Cal.4th 1150 (single recovery rule for overlapping claims)
- Kim v. Euromotors West/The Auto Gallery, 149 Cal.App.4th 170 (de novo review for legal basis of fee awards)