In Goglin v. BMW of North America, LLC, 2016 WL 6135482, at *5–6 (Cal.App. 4 Dist., 2016), the Court of Appeal held that a so-called Benson response to a CLRA letter does not immunize an auto dealer/manufacturer from attorneys’ fees incurred to prosecute a claim under the Song-Beverly Act.
Both BMW North America and BMW San Diego contend Goglin is not entitled to any attorney fees or costs because she unreasonably refused to accept BMW San Diego’s prelitigation settlement offer. However, this contention ignores the unfavorable aspects of the offer, including requiring Goglin to agree to a broad release of claims and a confidentiality clause.11 Goglin repeatedly and consistently objected to these extraneous provisions and the parties’ final settlement agreement does not include them. Rejecting the prelitigation settlement because of these unfavorable extraneous terms was not unreasonable. (McKenzie v. Ford Motor Company, supra, 238 Cal.App.4th at pp. 705–708 [court abused its discretion in denying attorney fees to a plaintiff in a Song–Beverly Act case for the period after the plaintiff rejected an initial settlement offer with extraneous nonfinancial terms, including a broad release of claims and an illegal confidentiality clause, because the plaintiff’s rejection of a settlement offer with such terms was not unreasonable]; Gezalyan v. BMW of N. Am., LLC (C.D.Cal 2010) 697 F.Supp.2d 1168, 1170 [the plaintiff in a Son–Beverly Act case is entitled to attorney fees after rejecting a repurchase offer containing numerous nonfinancial conditions not authorized by the act, including requiring agreement to a general release and a confidentiality clause].) Additionally, the record belies BMW North America’s and BMW San Diego’s assertions Goglin could have avoided litigation and settled the matter earlier had she negotiated more at the outset. Goglin’s counsel unambiguously communicated in a letter countering the prelitigation settlement offer that Goglin was unwilling to agree to a general release or a confidentiality clause. There is no indication in the record BMW North America or BMW San Diego ever responded to this letter. Rather, several months after the litigation commenced, BMW North America and BMW San Diego made another settlement offer including these same conditions even though they knew Goglin objected to the conditions and they should have known the confidentiality clause was unlawful as to Goglin’s Song–Beverly Act claims (see fn. 11, ante). Goglin’s counsel again unambiguously communicated in a letter countering the offer that Goglin was unwilling to agree to a general release or a confidential clause. There is no indication in the record BMW North America or BMW San Diego ever responded to this letter either. Although, with a mediator’s assistance, BMW North America and BMW San Diego ultimately agreed to a settlement without these conditions, their appeals are largely premised on their belief Goglin should have accepted a settlement with the conditions notwithstanding statutory and case law supporting her position. Accordingly, we cannot conclude the failure to resolve this case earlier was attributable solely to Goglin’s obstinacy or a desire on her counsel’s part to generate fees. Benson v. Southern California Auto Sales, Inc. (2015) 239 Cal.App.4th 1198 (Benson), upon which BMW North America and BMW San Diego rely, is inapposite. The Benson case involved a motion for attorney fees under the Consumers Act. (Id. at pp. 1205, 1209.) The case held attorney fees are not recoverable in an action for damages under this act when the defendant makes an appropriate correction offer within 30 days after the plaintiff provides the defendant with the prelitigation notice required by the act. (Id. at p. 1212.) The case further held conditioning the correction offer on the plaintiff’s agreement to release all other non-Consumers Act claims did not render the correction offer inappropriate because plaintiff’s non-Consumers Act claims had no independent value, settlement agreements routinely include mutual releases of all claims, and the Consumers Act does not prohibit the release of non-Consumers Act claims. (Id. at pp. 1209–1210.) Unlike here, the Benson case did not involve a motion for attorney fees under the Song-Beverly Act (Benson, supra, 239 Cal.App.4th at p. 1209), which does not have a comparable prelitigation notice requirement. The case also did not address whether the rejection of a prelitigation settlement offer would preclude entitlement to an attorney fee award under the Song–Beverly Act where the offer is conditioned upon agreement to a confidentiality clause prohibited by the act. The Benson case, therefore, provides no guidance for resolving this appeal.