Plaintiffs' Joint § 998 Offer Holds Up

Gonzalez v. Lew, No. B271312 (D2d3 Mar. 1, 2018) 
 
This is a wrongful death case arising out of a house fire where two people were killed. Plaintiffs made a joint, undifferentiated offer of judgment under Code of Civil Procedure § 998 for $1.5 million. Defendants didn’t accept it, and a jury ultimately awarded $2.6 million. So the Court awarded Plaintiff’s their expert fees and interest on the award from the date the offer expired. 

Defendants challenge the cost-shifting and interest. They say the offer was too vague to be enforced under the standards applicable to § 998 offers. At first glance, they seem to have the law on their side.

California courts have held that a lump-sum § 998 offer from one defendant to multiple plaintiffs, without allocating between the plaintiffs, is unenforceable. Generally, that’s because, absent an allocation, it’s not possible to tell which plaintiff beat the offer. But even if one plaintiff could never beat the offer (e.g., a defense verdict as to that plaintiff), however allocated, joint offers are generally held invalid because they would require further proceedings to allocate the award, and are of a form where no one recipient can accept them. They thus do not serve the pro-settlement purposes of § 998. 

Same rules apply to a single plaintiff’s lump-sum offer to multiple defendants. There are some exceptions to this rule, particularly when a group of plaintiffs or defendants have some unitary interest in the award. E.g., husband and wife, decedent and heirs. 

But the law isn’t so uniform when lump sum offers are made by multiple parties. Compare Persson v. Smart Inventions, Inc., 125 Cal. App. 4th 1141 (2005) (offer by multiple defendants held valid); Fortman v. Hemco, Inc., 211 Cal. App. 3d 241 (1989) (offer by multiple plaintiffs held valid); Stallman v. Bell, 235 Cal. App. 3d 740 (1991) (same) with Hurlbut v. Sonora Cmty. Hosp., 207 Cal. App.3d 388 (1989) (joint offer invalid); Gilman v.Beverly Cal. Corp., 231 Cal. App. 3d 121 (1991). The court here takes the validity route. According to the court, the rationales of the cases holding that a multi-plaintiff lump sum is invalid don’t hold up. When multiple plaintiffs make a single offer, there’s no allocation issue—if the offer has been jointly authorized, allocation is likely decided in advance. And there’s no issue about multiple acceptances being required. And the court doesn’t have any problem with the idea that in a multiple plaintiff offer, the target the defendant needs to beat is just the aggregate. 

Affirmed.