In a recent legal dispute, Antonio Arriagarazo and Alicia Rodriguez de Arriaga filed a complaint against BMW of North America, LLC, and Bayerische Motoren Werke AG (collectively referred to as BMW). The complaint was filed in the Court of Appeal of the State of California, Third Appellate District (Butte) on May 29, 2024. The plaintiffs sought attorney fees following their successful appeal and reinstatement of a Code of Civil Procedure section 998 stipulated judgment.
The case originated from a tragic car accident that resulted in the death of the appellants' son. In response, Antonio Arriagarazo and Alicia Rodriguez de Arriaga filed a cross-complaint against BMW alleging strict product liability, negligence, and wrongful death. In April 2019, BMW proposed a settlement offer under section 998, agreeing to pay $15,000 in exchange for a general release of all claims with each party bearing its own costs and attorney fees. This offer was accepted by the appellants.
However, complications arose when the trial court entered a proposed stipulated judgment based on this settlement on May 28, 2019. BMW successfully moved to vacate this judgment later that year on November 19, arguing that the terms only contemplated a general release and dismissal rather than an entry of judgment. This led to an appeal by the appellants who challenged the trial court's decision to vacate the judgment. The appellate court reversed this order in April 2021 and awarded costs on appeal to the appellants.
Following these events, appellants sought additional attorney fees incurred during their successful appeal process. They argued that equitable principles warranted such an award due to what they described as "BMW’s bad faith" actions in initially offering a Section 998 judgment only to later move to vacate it. Despite these arguments, BMW contended there was no statutory or contractual basis for awarding attorney fees and that any motion for such fees was untimely.
On September 28, 2022, the trial court denied the appellants' motion for attorney fees citing multiple reasons: untimeliness under California Rules of Court rule 3.1702(c)(1), improper attempt to relitigate an issue already decided by BMW’s motion to tax costs, and lack of statutory or contractual grounds for such an award. Subsequently, on October 18, 2022, appellants filed their notice appealing this order.
Ultimately applying de novo review standards as outlined in Loduca v. Polyzos (2007), the appellate court agreed with BMW's position that there was no legal basis for awarding attorney fees in this context. Citing California's adherence to the American Rule—which generally requires each party to bear its own legal costs unless otherwise specified by contract or statute—the court found no valid grounds within either tort claims or settlement agreements presented by appellants for recovering attorney fees.
As such judgments were affirmed without addressing whether procedural aspects regarding timeliness or attempts at relitigation influenced denial decisions further emphasizing adherence strictly towards substantive law interpretations around fee recoverability principles prevalent within Californian jurisprudence frameworks.
Representing respondents were attorneys from notable law firms while judicial oversight included Honorable Krause J., Renner Acting P.J., Boulware Eurie J., Case ID: C097296; Super Ct No.:161863