maximum amount plaintiff could recover at trial exempted him from the usual consequences of Section 998. The Court of Appeal did not agree with the finding and reversed the trial court’s decision. The Court of Appeal in Ayer found the attorney fee and costs awards in favor of buyers under Civil Code § 1794(b) are not exempt from CCP § 998. The Court of Appeal also found that the limitations of Section 998 still apply when the litigation is resolved by settlement, with no verdict from a trial. Importantly, the Court of Appeal relied on Madrigal v. Hyundai Motor America, which is currently pending before the California Supreme Court. The Ayer court found the change in law during litigation did not exempt the plaintiff from the consequences of denying an offer pursuant to CCP § 998. The court reasoned that rejection of a reasonable settlement offer bears a risk. Accordingly, the judgment of the trial court was reversed and remanded with instructions to enter a new judgment excluding any costs incurred by the plaintiff after the manufacturer’s third Section 998 offer. The recent court opinion in Ayer favors defendants in a Song-Beverly lawsuit highlights the importance of comprehensive legal defense strategies and adherence to industry standards. The Court of Appeal ruling not only reaffirms the rights of manufacturers but also highlights the nuanced complexities of consumer protection laws. As legal precedents continue to evolve, it is crucial for businesses to stay informed and engage proactively with legal counsel to navigate potential legal challenges effectively. If your business is facing Song-Beverly claims or seeks proactive legal guidance, we invite you to contact one of the many qualified legal professionals at Scali Rasmussen to explore our firm’s expertise in this area and discover how we can help safeguard your interests. “We have a fantastic relationship with the LSL team. They keep our interests top of mind and maintain a positive reputation in the industry.” —Craig Whetter, President | David Wilson Automotive Group (relationship since 1983) Donald Slater, CPA, Partner Assurance & Advisory donald.slater@lslcpas.com Adam Odom, CPA, Partner Assurance & Advisory adam.odom@lslcpas.com David Myers, MST, CPA, Partner Tax & Advisory dave.myers@lslcpas.com LSL | CPAs & Advisors | Brea, Laguna Hills, Sacramento & Santa Ana, CA | The Woodlands, TX | lslcpas.com/automotive | 714.672.0022 NCDA.COM 21
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