Appellate Court Rules Dealerships May Rely on Previous Written Settlement Offers

Appellate Court Rules Dealerships May Rely on Previous Written Settlement Offers

The California Appellate Court recently confirmed in Madrigal v. Hyundai Motor America - 2023 S.O.S. 1464 that a Dealership can rely on a previous written settlement offer, even if a lawsuit ends by settlement.

California Law, most commonly the Consumers Legal Remedies Act and Consumer Warranty Act, often requires the Dealership to pay the customers’ attorneys’ fees and costs. However, a powerful tool used to mitigate these costs is to send out a settlement offer (officially named a Code of Civil Procedure Section 998 Offer) as early as possible.

Under the current ruling, if the customer fails to beat the written settlement offer later in the lawsuit, the Dealership may use that as a way to try and cut off those attorney's fees and costs, even if the lawsuit ends before trial.