Did Caterpillar’s Attorneys Commit Malpractice When They Served a 998 Offer?

  In Wohlgemuth v. Caterpillar, plaintiffs purchased a new motor home that had an engine manufactured and warranted by Caterpillar. Plaintiffs claimed the engine was defective and sued Caterpillar under the Song-Beverly Consumer Warranty Act, alleging Caterpillar failed to repair the defects after a reasonable number of attempts. Shortly before trial, Caterpillar served and filed the following Code of Civil Procedure section 998 offer:

“Pursuant and subject to the provisions of Code of Civil Procedure § 998, defendant Caterpillar Inc., without admitting liability, hereby offers to pay to plaintiffs . . . the total sum of Fifty Thousand Dollars ($50,000.00), in exchange for the dismissal with prejudice of the entire action and general release of all claims as to this defendant.”

  Plaintiffs filed an acceptance of the offer and a dismissal. Thereafter, plaintiffs moved for attorney fees under the Song-Beverly Act. The trial court found plaintiffs to be the prevailing parties and awarded attorney fees to plaintiffs in the amount of $117,625 and costs in the amount of $7,737.08. Affirmed. Continue reading