Licudine v. Cedars-Sinai Med. Cntr., No. B286350 (D1d2 Jan. 3, 2019)
If a Defendant turns down a Plaintiff’s valid § 998 offer and then Plaintiff beats the number at trial, Plaintiff gets to recover prejudgment interest from the date of the offer. But the offer has to be valid. And to be valid, the offer has to have been made in good faith—§ 998 exists to foster reasonable settlements, not to reward the parties for engaging in gamesmanship.
Here, Plaintiff, who made no demand in her prayer for relief, sprung a §998 offer on defendant only a few days after the answer was filed. Defendant had yet to obtain any discovery on damages. (Or basically anything else for that matter.) The Court of Appeal here affirms the trial court’s finding that the offer wasn’t in good faith. In doing so, it notes that although the good faith analysis looks to a totality of the circumstances, three factors are “especially pertinent”: “(1) how far into the litigation the 998 offer was made; (2) the information available to the offeree prior to the 998 offer’s expiration; and (3) whether the offeree let the offeror know it lacked sufficient information to evaluate the offer, and how the offeror responded.”
Affirmed.
Showing posts with label offer of judgment. Show all posts
Showing posts with label offer of judgment. Show all posts
Monday, January 7, 2019
Thursday, May 10, 2018
Section 998 Offer Exclusive of Fees Is Unambiguous
Timed Out LLC v. 13359 Corp., No. B280301 (D2d1 Mar. 27, 2018)
In a case where attorneys’ fees are recoverable as a cost, a Code of Civil Procedure § 998 offer of judgment that offers a payment “exclusive of reasonable costs and attorneys’ fees, if any,” unambiguously permits an accepting plaintiff to move for recovery of the attorneys’ fees in the event she accepts the offer. Which means the offer made in this case was valid.
Affirmed.
In a case where attorneys’ fees are recoverable as a cost, a Code of Civil Procedure § 998 offer of judgment that offers a payment “exclusive of reasonable costs and attorneys’ fees, if any,” unambiguously permits an accepting plaintiff to move for recovery of the attorneys’ fees in the event she accepts the offer. Which means the offer made in this case was valid.
Affirmed.
Wednesday, April 4, 2018
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.
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.
Tuesday, September 13, 2016
This Release Does Not Compute
Ignacio v. Caracciolo, No. B266930 (D2d8 Aug. 3, 2016)
This is another case where an insurance company gets over its skis by making a Code of Civil Procedure § 998 offer of judgment that tries to do more than just enter judgment in the case along the terms of the offer. This time, the offer includes an agreement to a broad general release, including a waiver of unknown claims under Civil Code § 1542. Plaintiff didn’t take the deal. At trial, Insurer won a verdict below the offer’s cash consideration, so it sought cost shifting. On appeal, the Court of Appeal finds the offer invalid. Problem is, when a release is broader than the claims in the case, the value of the offer vs. what was won at trail can’t really be rationally compared. Suppose, for instance, that plaintiff had some multi-million dollar claim against the insurer on some other issue that wasn’t in the case. Since the release offered was far broader than the case with respect to the releasing parties, the released parties, and the claims being released, it couldn’t be fairly valued under the § 998 calculus.
Affirmed.
This is another case where an insurance company gets over its skis by making a Code of Civil Procedure § 998 offer of judgment that tries to do more than just enter judgment in the case along the terms of the offer. This time, the offer includes an agreement to a broad general release, including a waiver of unknown claims under Civil Code § 1542. Plaintiff didn’t take the deal. At trial, Insurer won a verdict below the offer’s cash consideration, so it sought cost shifting. On appeal, the Court of Appeal finds the offer invalid. Problem is, when a release is broader than the claims in the case, the value of the offer vs. what was won at trail can’t really be rationally compared. Suppose, for instance, that plaintiff had some multi-million dollar claim against the insurer on some other issue that wasn’t in the case. Since the release offered was far broader than the case with respect to the releasing parties, the released parties, and the claims being released, it couldn’t be fairly valued under the § 998 calculus.
Affirmed.
Tuesday, May 31, 2016
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.
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.
Sunday, October 11, 2015
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.
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.
Thursday, September 17, 2015
Prevailing as One Is Not Prevailing as Many
Kahn v. The Dewey Grp., No. B259679 (D2d3 Sept. 8, 2015)
Plaintiff, a mobile home tenant, alleges that twenty different defendants caused him to be exposed to harmful industrial chemicals that were disposed of on land that would later become the trailer park. All twenty defendants jointly made a Code of Civil Procedure § 998 offer of judgment for $75,000. Fourteen defendants got out on nonsuit. The other six went to a trail, where the jury deadlocked and a mistrial was declared. Although the retrial was pending, the fourteen nonsuited defendants moved to recover their proportionate share of expert costs, which the trial court granted. Plaintiff appealed.
Plaintiff, a mobile home tenant, alleges that twenty different defendants caused him to be exposed to harmful industrial chemicals that were disposed of on land that would later become the trailer park. All twenty defendants jointly made a Code of Civil Procedure § 998 offer of judgment for $75,000. Fourteen defendants got out on nonsuit. The other six went to a trail, where the jury deadlocked and a mistrial was declared. Although the retrial was pending, the fourteen nonsuited defendants moved to recover their proportionate share of expert costs, which the trial court granted. Plaintiff appealed.
Monday, July 20, 2015
No Piggybacking on a Co-Defendant's 998
Litt v. Eisenhower Med. Ctr., No. D067455 (D4d1 Jun. 19, 2015)
Plaintiff got hurt in a hospital cafeteria. Defendant 1, the hospital, served a Code of Civil Procedure § 998 offer of judgment on Plaintiff for $15,000, which plaintiff rejected. Plaintiff subsequently amended his complaint to add Defendant 2, the cafeteria operator. Under the cafeteria contract, Defendants 2 agreed to indemnify Defendant 1 in cases like this one. At trial, plaintiff won a $3,000 verdict, joint and several against both defendants.
Trial court holds that, for the purposes fee shifting under § 998, Defendant 1—which served the offer—is a prevailing party. But Defendant 2—which didn’t serve an offer—is not. So only Defendant 1 gets to recover its post-offer costs. But it taxeed Defendant 1’s expert witness fees because under the cafeteria contract, those fees were indemnified by Defendant 2.
On appeal, the first point is easy. A defendant that doesn’t serve a § 998 offer and loses a net recovery at trial is not a prevailing party, in any sense of that term. But the trial court erred in taxing Defendant 1’s expert witness fees. The costs statute permits the award of costs incurred, even if not paid, and § 998 shifts incurred costs. A bunch of cases in the insurance context bear out that a plaintiff can recover expert witness fees, even if the bill was paid by someone else. So Defendant 1 should have recovered its expert witness fees, even if, at the end of the day, it wasn’t on the hook to pay them. The fact that the obliged indemnitor was also a defendant in the case and not, ultimately, a prevailing party on its own, didn’t make a difference.
Reversed in part.
Plaintiff got hurt in a hospital cafeteria. Defendant 1, the hospital, served a Code of Civil Procedure § 998 offer of judgment on Plaintiff for $15,000, which plaintiff rejected. Plaintiff subsequently amended his complaint to add Defendant 2, the cafeteria operator. Under the cafeteria contract, Defendants 2 agreed to indemnify Defendant 1 in cases like this one. At trial, plaintiff won a $3,000 verdict, joint and several against both defendants.
Trial court holds that, for the purposes fee shifting under § 998, Defendant 1—which served the offer—is a prevailing party. But Defendant 2—which didn’t serve an offer—is not. So only Defendant 1 gets to recover its post-offer costs. But it taxeed Defendant 1’s expert witness fees because under the cafeteria contract, those fees were indemnified by Defendant 2.
On appeal, the first point is easy. A defendant that doesn’t serve a § 998 offer and loses a net recovery at trial is not a prevailing party, in any sense of that term. But the trial court erred in taxing Defendant 1’s expert witness fees. The costs statute permits the award of costs incurred, even if not paid, and § 998 shifts incurred costs. A bunch of cases in the insurance context bear out that a plaintiff can recover expert witness fees, even if the bill was paid by someone else. So Defendant 1 should have recovered its expert witness fees, even if, at the end of the day, it wasn’t on the hook to pay them. The fact that the obliged indemnitor was also a defendant in the case and not, ultimately, a prevailing party on its own, didn’t make a difference.
Reversed in part.
Friday, June 5, 2015
More Non-Judgment Judgments
Lee v. Silveira, No. F067723 (D5 as modified June 8, 2015)
A PI plaintiff makes a § 998 offer of judgment for a million dollars. Defendant does not accept. The verdict was more than $1 million, but the court reduced the award under Howell v. Hamilton Meats & Provisions, Inc., 52 Cal. 4th 541, 548 (2011), which says the plaintiff is entitled to a damages award in the amount of her paid medical bills, not the amounts first billed, because the bills have no relationship with economic reality. After the reduction, the award dropped below $1 million. It is pretty clear that had the jury been asked calculate damages under Howell, the plaintiff wouldn’t have beaten the offer and thus couldn’t shift her substantial expert costs to defendant. The fact that the trial court did so post-hoc shouldn’t lead to a different result. The court so holds.
The court goes on to address a second issue regarding post-judgment procedure. Like a lot of post-judgment issues, it turns on the timing of the judgment. The jury’s original verdict was reflected in a document called “Judgment on Jury Verdict,” which, notwithstanding its title, specifically noted that it was subject to post-trial adjustments for the medical expenses and prejudgment interest. Defendants moved to reduce the “judgment” for the delta between the paid and billed expenses. Plaintiff did not contest the adjustment, but argued that prejudgment interest and her expert fees should be tacked on before the court made the adjustment. The court agreed with plaintiff and ultimately entered a new, final judgment that included the interest and fees. Defendant then moved under Code of Civil Procedure § 663 to vacate the judgment and enter a new one.
Plaintiff argued that the first “Judgment on Jury Verdict” was a bona fide judgment and thus should have been attacked by a motion for new trial. So when Defendant’s first motion was effectively denied, that was like denying a new trial motion, which is an appealable order that divests the court of jurisdiction to act further.
Problem is, an order that foresees further action by the trial court is not a judgment even if it has the word “judgment” in its title. (I really wish trial courts wouldn’t do that because of the chaos it tends to create, but it happens all the time.) So a post-verdict, pre-judgment motion directed to a remedy within the province of the trial court was entirely proper. And then when a legit final judgment did enter, a § 663 motion was an appropriate vehicle for defendant to use to have it corrected.
Affirmed.
A PI plaintiff makes a § 998 offer of judgment for a million dollars. Defendant does not accept. The verdict was more than $1 million, but the court reduced the award under Howell v. Hamilton Meats & Provisions, Inc., 52 Cal. 4th 541, 548 (2011), which says the plaintiff is entitled to a damages award in the amount of her paid medical bills, not the amounts first billed, because the bills have no relationship with economic reality. After the reduction, the award dropped below $1 million. It is pretty clear that had the jury been asked calculate damages under Howell, the plaintiff wouldn’t have beaten the offer and thus couldn’t shift her substantial expert costs to defendant. The fact that the trial court did so post-hoc shouldn’t lead to a different result. The court so holds.
The court goes on to address a second issue regarding post-judgment procedure. Like a lot of post-judgment issues, it turns on the timing of the judgment. The jury’s original verdict was reflected in a document called “Judgment on Jury Verdict,” which, notwithstanding its title, specifically noted that it was subject to post-trial adjustments for the medical expenses and prejudgment interest. Defendants moved to reduce the “judgment” for the delta between the paid and billed expenses. Plaintiff did not contest the adjustment, but argued that prejudgment interest and her expert fees should be tacked on before the court made the adjustment. The court agreed with plaintiff and ultimately entered a new, final judgment that included the interest and fees. Defendant then moved under Code of Civil Procedure § 663 to vacate the judgment and enter a new one.
Plaintiff argued that the first “Judgment on Jury Verdict” was a bona fide judgment and thus should have been attacked by a motion for new trial. So when Defendant’s first motion was effectively denied, that was like denying a new trial motion, which is an appealable order that divests the court of jurisdiction to act further.
Problem is, an order that foresees further action by the trial court is not a judgment even if it has the word “judgment” in its title. (I really wish trial courts wouldn’t do that because of the chaos it tends to create, but it happens all the time.) So a post-verdict, pre-judgment motion directed to a remedy within the province of the trial court was entirely proper. And then when a legit final judgment did enter, a § 663 motion was an appropriate vehicle for defendant to use to have it corrected.
Affirmed.
Sunday, October 20, 2013
Insurer that Refused to Return Calls Held to § 998 Offer Above Policy Limits
Aguilar v. Gostischef, No. B238853 (D2d8 Oct. 11, 2013)
The court of appeal holds that a Code of Civil Procedure § 998 offer to an insurer for more than policy limits is not in bad faith when there is a reasonable basis to believe that an insurer’s prior failures to communicate regarding a within-limits settlement could provide a basis for liability against the insurer exceeding its policy limits.
The court of appeal holds that a Code of Civil Procedure § 998 offer to an insurer for more than policy limits is not in bad faith when there is a reasonable basis to believe that an insurer’s prior failures to communicate regarding a within-limits settlement could provide a basis for liability against the insurer exceeding its policy limits.
Thursday, July 25, 2013
Man, You Should Have Taken that 998 Offer ...
Mon Chong Long Trading Corp. v. Superior Court, No. B240828 (D2d3 July 23, 2013)
The application of offer of judgment rule under Code Civil Procedure § 998 is one of the most litigated appellate issues in California Procedure. The question presented was whether a dismissal without prejudice on the eve of trial is a less favorable termination subjecting the plaintiff to a potential shifting of expert witness costs under § 998. According to the court, the answer is yes.
The application of offer of judgment rule under Code Civil Procedure § 998 is one of the most litigated appellate issues in California Procedure. The question presented was whether a dismissal without prejudice on the eve of trial is a less favorable termination subjecting the plaintiff to a potential shifting of expert witness costs under § 998. According to the court, the answer is yes.
Subscribe to:
Posts (Atom)