Law Firm Leaves GM and BMW With a Bitter Taste : Litigation: Taylor & Hodges sees a steady traffic of clients unhappy with their new cars who want to file lemon law suits. A Westminster man’s case is one example.
It was Halloween night in 1988 when Mark Lautherboren of Westminster plopped down $10,000 in cash for a new blue Chevy pickup truck. The next morning when the Rockwell electronics assembler could see better, he discovered his truck had paint blisters, bubbles, scratches, torn seats and fire damage in the engine.
That’s when Lautherboren began his odyssey with General Motors and one of its dealerships--which he alleged in court repeatedly failed to repair the truck. On April 15, an Orange County Superior Court jury ordered GM to pay Lautherboren $42,587 in damages, including $10,000 in civil penalties for willful violation of the state’s so-called lemon law.
Lautherboren, now 31, says he’ll never buy another GM car. “After this experience, I’ll never buy a new vehicle--period.”
Such afterthoughts are all too familiar to Taylor & Hodges, a small Glendale law firm that is one of the biggest lemon law specialists in the country. Since late 1987, the four-lawyer firm says it has filed more than 900 lemon case lawsuits against virtually every vehicle manufacturer.
Norman Taylor, the firm’s founder, said his firm has won refunds totaling about $14 million for more than 1,000 people who apparently bought lemons. Every month the firm gets hundreds of calls from people complaining about their vehicles, from which Taylor & Hodges takes 30 as actual cases. The current active caseload is about 300, and the firm’s annual revenue is estimated at $1.5 million.
If the law firm wins the case it applies to the judge for fees. To start a case, Taylor & Hodges charges an average of $1,000 from the plaintiff, and if the case is settled out of court the law firm negotiates its fees with the defendant.
Taylor, 39, believes there are tens of thousands of Southern Californians who have lemon cars but are unaware of the lemon law.
“People have just not been aware of it,” Taylor said.
California’s lemon law, called the Song-Beverly Consumer Warranty Act of 1970, requires manufacturers to replace a vehicle or refund a buyer when a new vehicle is in the shop for defects for more than a “reasonable” amount of time. It is considered reasonable if a vehicle is in the shop four times for any one problem within the first year or 12,000 miles of ownership, but there is no minimum requirement. A similar federal lemon law was enacted in 1975.
Taylor, a 1987 graduate of Glendale School of Law, said he didn’t study lemon law in school. And he never really planned to be a lemon law specialist. But his first case involved a friend who had car troubles, and Taylor figured there was a future in a field that a few years ago had only a handful of specialists. Today there are about three dozen members of the California Lemon Lawyers Assn.
Al Hodges, a native of Glendale who went to the USC Law School at night, teamed up with Taylor about 18 months ago.
Taylor’s first lemon case was against BMW. The result: A jury in February, 1992, awarded a Beverly Hills businessman $160,000 in damages for repeated battery failures involving his new $82,000 BMW 750i. At the time, it was the largest lemon-law award in U.S. history.
Some manufacturers like to play “hardball,” said Hodges, a gruff trial lawyer who wears off-color suits and boots.
“But we have complaints against every manufacturer,” including about 150 active cases against GM, he said.
Not surprisingly, Taylor & Hodges is well known among car manufacturers. Spokesmen for the car makers won’t talk on the record about the law firm.
But John Maciarz, a GM spokesman in Detroit, said the auto maker was disappointed in the result in the Lautherboren case: “We thought our case was extremely strong.”
Of lemon law cases in general, Maciarz said, “Obviously our goal is to try to satisfy the customer before it gets to this point.”
Before Hodges joined him, Taylor buttressed his business by co-authoring a lemon law manual for consumers and being involved in consumer rights groups. But Taylor also made one big career misstep.
After he won a case against Toyota Motor Sales in 1990, Taylor petitioned the judge in the trial for $137,000 in attorney fees. (Under the California lemon law, a manufacturer that loses a case must also pay attorney fees.) But the judge in the case slashed Taylor’s fees to $30,000 along with critical comments. Taylor appealed the judge’s action, which was ultimately affirmed by the appeals court.
The decision embarrassed Taylor and left other attorneys cringing because of the size of Taylor’s requested fees.
“It left a bad taste in our mouths,” said Alan Golden, of the Encino law firm of Freeman & Golden. Golden, who has been specializing in lemon law for about seven years, said that case gave the lemon law practice a bad image.
He added, “In my opinion, in general the plaintiff’s bar that does this work is very ethical.” Taylor had little to say about that incident, but he conceded, “It was a bad case to take on appeal.”
Taylor and Hodges, however, claim that their record of success is strong and that most of their clients are satisfied with their work. But Lautherboren, the buyer of the Chevy truck, had mixed feelings about Taylor & Hodges. Although pleased with the result, Lautherboren said the law firm appeared burdened by its heavy case load. “Their attitude was, if we need you, we’ll call you.”
Hodges, who tried Lautherboren’s case, didn’t offer any apologies. But he said Taylor & Hodges has to be selective in the cases it takes on because the firm must win to recoup its time and effort.
In one case, Hodges said he represented clients who said they had troubles with a motor home.
But when the case went to trial, Hodges said, “it turned out that he and another guy were running a scam to defraud a finance company.” Hodges still has trouble swallowing that case, which he lost. “I’m going to sue him for defrauding me out of my time and attorney fees.”
