Zero-Dollar § 998 Offer Found Reasonable

Melendrez v. Ameron Int’l. Corp., No B256928 (D2d Sept. 17, 2015)

Plaintiff lost at summary judgment in this asbestos case because his exposure was in the workplace, which meant his exclusive remedy was workers’ comp. While its SJ motion was pending, Defendant made a rather aggressive offer of judgment under Code of Civil Procedure § 998 offer, proposing a dismissal in exchange for a mutual waiver of costs and fees. Because plaintiff didn't beat hte offer, the court permitted the shifting of costs, including significant expert witness fees. Plaintiff moved to tax, arguing that the lowball § 998 offer was in bad faith and that certain expert expenses were not sufficiently related to the expert’s testimony to be recoverable. The trial court disagreed.

The court of appeal affirms. A plaintiff’s failure to beat a defendant’s § 998 offer merits a presumption that the offer was reasonable. To rebut the presumption, Plaintiff bears the burden of showing unreasonableness. While a court can consider plaintiff’s in assessing reasonableness, it’s by far the only thing that matters. Courts can also consider the amount of costs to be shifted and the plaintiff’ likelihood of prevailing. So when a defendant has a strong defense—like Defendant’s workers’ comp defense here—it can permissibly make a low offer. That’s particularly true here, where discovery was largely complete and the SJ motion pending by the time Defendant made its offer. So Defendant could make a good-faith informed assessment of the strength of Plaintiff’s case and the value of its claims.

There’s also an issue about allocation of expert fees. Defendant’s experts inspected Plaintiffs home—to which he had brought home various asbestos-containing goods from work for use in home improvement projects—for contamination. When the found asbestos, they also did significant remediation work to remove it. Work done to inspect is recoverable as part of the experts’ work in preparing to testify in the case. But work done to remove contamination is not. Here, the court finds that the trial court made a permissible allocation, excluding recovery for various work that was solely for remediation purposes. To the extent the trial court permitted recovery of some expenses whose purpose wasn’t completely clear, it was the court’s prerogative to make factual findings regarding whether any work was necessity to the expert’s testimony. So long as substantial evidence in support them, which it does, those findings don’t get disturbed on appeal.

Affirmed.