Murillo v. Fleetwood Enterprises, Inc.

MOSK, J.

I dissent.

The majority hold that if a consumer brings an unsuccessful action under the Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.), *1002popularly known as the automobile “lemon law,” the seller is entitled to recover its costs and, in some circumstances, expert witness fees. I disagree. The holding—which will leave consumers who lose their claims liable to sellers in an amount that can easily equal or even exceed the value of the alleged “lemon”—is inconsistent with the statutory language. It will also, undoubtedly, have a chilling effect on the exercise of consumer rights, thereby defeating what the majority acknowledge to be the “strongly pro-consumer” protections of the act. (Maj. opn., ante, at p. 990.)

Here, buyer, who brought an action alleging that the vehicle he purchased was defective and rejected a settlement offer by sellers, lost his case under the Song-Beverly Consumer ■ Warranty Act. Although the jury decided against him, there was no claim by sellers that the action was frivolous. Nonetheless, he suffered the equivalent of a substantial penalty for bringing the claim: He was required to pay sellers $6,642.99 in costs and expenses.

The Song-Beverly Consumer Warranty Act, in relevant part, provides: “If the buyer prevails in an action under this section, the buyer shall be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses, including attorney’s fees based on actual time expended, determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of such action.” (Civ. Code, § 1794, subd. (d).) It conspicuously does not provide for any award of costs and expenses if the seller prevails.

The majority hold that sellers here were nonetheless entitled to costs and expert fees under the general cost-shifting provisions of Code of Civil Procedure sections 1032 and 998. Code of Civil Procedure section 1032, subdivision (b), provides that “[ejxcept as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” Code of Civil Procedure section 998, subdivision (c)(1), provides that if a settlement offer is made by a defendant and not accepted, and the plaintiff fails to obtain a more favorable judgment, costs allowed under section 1032 shall be augmented to include defendant’s costs from the time of the offer and, in addition, the trial court may require the plaintiff to pay the costs of the services of the defendant’s expert witnesses. The majority determine that these general cost-shifting provisions apply because the Song-Beverly Consumer Warranty Act does not “expressly” state that a prevailing seller is not entitled to recover costs, or to have such costs augmented if the buyer rejects a settlement offer and fails to obtain a more favorable judgment or loses the action.

I disagree. The specific costs provisions of the Song-Beverly Consumer Warranty Act, which mandate the prevailing buyer’s recovery of “a sum *1003equal to the aggregate amount of costs and expenses, including attorney’s fees based on actual time expended,” were intended by the Legislature to displace the general cost-shifting provisions of the Code of Civil Procedure. In effect, they “occupy the field.” It was therefore not necessary for the Legislature also to state the negative, i.e., that a prevailing seller may not recover costs and expenses. Had it intended to apply a one-way rule only to attorney fees, as the majority propose, the Legislature could readily have so specified.

The legislative history of the Song-Beverly Consumer Warranty Act supports the conclusion that it was intended to “occupy the field” by providing for recovery of costs and expenses only by the prevailing consumer. Thus, an analysis prepared by the Assembly Committee on Labor, Employment and Consumer Affairs explains the purpose of the costs provision: “Indigent consumers are often discouraged from seeking legal redress due to court costs. The addition of awards of ‘costs and expenses’ by the court to the consumer to cover such out-of-pocket expenses as filing fees, expert witness fees, marshall’s fees, etc., should open the litigation process to everyone.” (Assem. Com. on Labor, Employment and Consumer Affairs, Analysis of Assem. Bill No. 3374 (1977-1978 Reg. Sess.) May 24, 1978, p. 2.) Similarly, an analysis prepared by the Department of Consumer Affairs states: “The bill would amend . . . [the Act] to provide that a prevailing consumer may be awarded costs (court costs, i.e. filing and process fees) and expenses (i.e. expert witness fees). The absence of such a provision can deter consumers from pursuing a violation of the Act through the courts, a disadvantage not equally felt by the retailer or manufacturer.” (Dept. Consumer Affairs, Enrolled Bill Rep. on Assem. Bill No. 3374 (1977-1978 Reg. Sess.) Aug. 30, 1978, p. 3, italics added.)

The conclusion that the Song-Beverly Consumer Warranty Act displaces the general cost-shifting provisions of the Code of Civil Procedure is also consistent with the well-reasoned decisions in Dawson v. Westerly Investgations, Inc. (1988) 204 Cal.App.3d Supp. 20 [251 Cal.Rptr. 633] and Rogers v. Superior Court (1993) 19 Cal.App.4th 469 [23 Cal.Rptr.2d 412], Thus, in Dawson, the employer successfully appealed an unfavorable decision by the California State Labor Commissioner and sought costs and attorney fees pursuant to Code of Civil Procedure section 1032. The Court of Appeal concluded that an award under the general cost-shifting provisions of the Code of Civil Procedure was barred by Labor Code section 98.2, subdivision (b), which provides, in pertinent part, that “[i]f the party seeking review by filing an appeal ... is unsuccessful in the appeal, the court shall determine the costs and reasonable attorneys’ fees incurred by the other parties to the appeal, and assess that amount as a cost upon the party filing *1004the appeal.” Although the Labor Code provision says nothing about denying costs in the case of a successful appellant—i.e., is silent regarding the ability of a prevailing defendant to recover costs pursuant to the general cost-shifting provisions of the Code of Civil Procedure (see maj. opn., ante, at p. 997)—Dawson concluded that it constituted an “express” exception to the general cost-shifting provisions of Code of Civil Procedure section 1032. (Dawson v. Westerly Investigations, Inc., supra, 204 Cal.App.3d at p. Supp. 24.)

Similarly, in Rogers, the Court of Appeal ruled that an award under the general cost-shifting provisions of the Code of Civil Procedure was barred by Government Code section 6259, subdivision (d), which provides, in pertinent part, that “[t]he court shall award court costs and reasonable attorney fees to the plaintiff should the plaintiff prevail in litigation filed pursuant to this section. ... If the court finds that the plaintiff’s case is clearly frivolous, it shall award court costs and reasonable attorney fees to the public agency.” Although the Government Code provision says nothing about denying costs in the case of a prevailing defendant when the plaintiff’s case was not clearly frivolous—i.e., is silent regarding the ability of a prevailing defendant to recover costs pursuant to the general cost-shifting provisions of the Code of Civil Procedure (see maj. opn., ante, at p. 997)—the Court of Appeal concluded that “the specific provisions of the Act must prevail over the more general provision of the Code of Civil Procedure.” (Rogers v. Superior Court, supra, 19 Cal.App.4th at p. 484; see also In re Marriage of Green (1989) 213 Cal.App.3d 14, 24 [261 Cal.Rptr. 294] [Code of Civil Procedure section 998 does not apply to family law cases, because the Legislature has specifically provided how costs and fees are to be awarded in such proceedings.].)

The Song-Beverly Consumer Warranty Act, like the statutes at issue in Dawson and Rogers, clearly “supplants the general rule set forth in [Code of Civil Procedure] section 1032[, subdivision] (b)” and section 998. (See maj. opn., ante, at p. 997.) The operative question is not, as the majority propose, whether the more specific statute merely refers in some way to both parties, or whether the availability of attorney fees under the more specific statute can be asserted to “sufficiently vindicate[]” the legislative purpose (see maj. opn., ante, at p. 996). Rather, the dispositive point is that the costs provisions of the Song-Beverly Consumer Warranty Act are no more “reconcilable” than were the statutes at issue in Dawson and Rogers with the general cost-shifting provisions of the Code of Civil Procedure.

Nor is the majority’s holding reconcilable with the “strongly pro-consumer” legislative purpose of the Song-Beverly Consumer Warranty Act.

*1005The financial burden of losing a claim under the act is now substantial—as the nearly $7,000 bill of costs in addition to the buyer’s own costs in this case well demonstrates. The risk of such a loss will doubtless constitute a major deterrent for precisely the low-income and middle-income buyers the act was designed to protect. The majority offer the meager consolation that the attorney fee provision “which favors buyers exclusively” is sufficient “to vindicate the Legislature’s purpose in enacting the Song-Beverly [Consumer Warranty] Act.” (Maj. opn., ante, at p. 994.) But if the general rule of Code of Civil Procedure section 1032 applies, what would prevent a prevailing seller from also enforcing a contractual attorney fee provision? It is not difficult to forecast the content, in small print, of future automobile dealers’ sales contracts.

For the foregoing reasons, I would reverse the judgment of the Court of Appeal.

Appellant’s petition for rehearing was denied July 8, 1998. Mosk, J., was of the opinion that the petition should be granted.