Thank You, the Tentative Stands.

FWIW, this is 111 N. Hill's 500th post!

Stanford v. Rasnick, No. A145904 (D1d2 Apr. 25, 2016)

Two Defendants in an auto accident case (a father and son) made a joint $130,000 offer under Code of Civil Procedure § 998. Or perhaps more accurately, their insurance company did. The offer was not allocated between Defendants and was conditioned on Plaintiff to entering a “written settlement agreement” Plaintiff didn’t take it. After adjusting for comparative liability and adding pre-offer costs, plaintiff won a recovery of $122k—just under the § 998 amount. Both sides sought costs and both moved to tax. The court agreed with Defendants on basically all counts. It found the § 998 offer was valid and thus Plaintiff could not recover his post-offer costs while Defendants could recover their post-offer costs, as well as their expert witness costs. It further taxed Plaintiff’s pre-offer costs, finding that his share of the cost of a mediator and certain attorney service charges were “not allowed.”

The Court of Appeal reverses on both points. So far as the § 998 offer goes, to be valid, it needed to be unambiguous. If accepted, it needs to be clear on its face as to what it is being offered and accepted. If collateral litigation might be needed to suss out the terms of the deal, the offer is not valid. 

Payment in exchange for a release is clear. But conditioning an offer on entering a “settlement agreement,” particularly one of terms unspecified, is not. Although Defendants contend that they made a “a standard, insurance defense offer,” the Court isn’t buying it. Just because a practice is common doesn’t make it correct. Simply put, Plaintiff can’t be put to accepting or rejecting a § 998 offer that includes entering a “settlement agreement” when he doesn’t know what the terms of the settlement hearing are ex ante.

So far as plaintiffs’ costs go, neither mediation expenses or attorney service costs are “not allowed.” They are, instead, not automatic, but nonetheless awardable in the discretion of the court. The Court of Appeal makes the point of noting that in the extensive oral argument on the costs issue, plaintiff pointed this out and asked the court to explain any discretionary denial. The trial court’s response was curt “thank you.”* It then stood on the tentative. The Court of Appeal finds that was error because the trial court abdicated its discretion by treating the costs as categorically disallowed.

Reversed and remanded.

*The opinion notes that the oral argument on the motion was “quite lengthy” and seems exasperated—or at least puzzled—by the fact that Plaintiff sensibly pointed out some mistakes in the tentative and the trial judge did not so much as react. That, however, is not an uncommon occurrence so far as law and motion oral arguments in a California Superior Court goes. 

Indeed, given the low value many trial judges put on oral argument on law and motion matters, and the incredibly burdened dockets of the superior courts, I often wonder why they bother. It’s not like—other than in some specific circumstances like summary judgment—a court is required to hold a hearing.  Nevertheless, unlike federal courts, which frequently rule without a hearing, California state courts basically always take oral argument. But if the court doesn’t perceive any value in it, one would think that, in the aggregate, the quality of justice would likely improve were the court to just rule on the papers and put that time to some better use.