Filed 3/3/21

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

MOSTAFAVI LAW GROUP, 

APC,

Plaintiff and Appellant,

v.

LARRY RABINEAU, APC, et. al.,

Defendants and

Respondents.

B302344

Los Angeles County

Super. Ct. No. BC565480

APPEAL from an order of the Superior Court of Los 

Angeles County, Teresa A. Beaudet, Judge. Affirmed.

Mostafavi Law Group, Amir Mostafavi; Joseph S. Socher,

for Plaintiff and Appellant.

Law Offices of Larry Rabineau, Larry Rabineau and 

Virginia Narian, for Defendants and Respondents.
2

INTRODUCTION

The Legislature enacted Code of Civil Procedure1 section 

998 to encourage and expedite settlement of lawsuits before trial. 

To effectuate this purpose, the statute simultaneously promotes 

the extension and acceptance of reasonable pretrial offers to 

compromise. The “policy is plain. It is to encourage settlement by 

providing a strong financial disincentive to a party—whether it 

be a plaintiff or a defendant—who fails to achieve a better result 

than that party could have achieved by accepting his or her 

opponent’s settlement offer. (This is the stick. The carrot is that 

by awarding costs to the putative settler the statute provides a 

financial incentive to make reasonable settlement offers.)” (Bank 

of San Pedro v. Superior Court (1992) 3 Cal.4th 797, 804.) 

Section 998, subdivision (b) requires, among other things, 

that a party seeking to take advantage of the statute serve on an 

opposing party a written offer to have judgment entered on 

specified terms. Most important, for purposes of this appeal, the 

written offer “shall” contain what has come to be known as an 

“acceptance provision.” (Perez v. Torres (2012) 206 Cal.App.4th 

418, 422 (Perez); Boeken v. Philip Morris USA Inc. (2013) 217 

Cal.App.4th 992, 1001 (Boeken).) Specifically, the statute states

that the written offer “shall” include “a provision that allows the 

accepting party to indicate acceptance of the offer by signing a 

statement that the offer is accepted.” (§ 998, subd. (b).) 

A number of cases have addressed whether a section 998 

offer without an acceptance provision is valid for purposes of 

triggering the statute’s cost-shifting provisions when the offer is 

1 All undesignated statutory references are to the Code of 

Civil Procedure. 
3

not accepted. This case poses an issue of first impression:

whether the purported acceptance of a section 998 offer lacking 

an acceptance provision gives rise to a valid judgment. 

Here, defendants and respondents Larry Rabineau, APC, 

and Larry Rabineau (collectively, “Rabineau”) served plaintiff 

and appellant Mostafavi Law Group (MLG) with a statutory offer 

to compromise. The offer did not specify how MLG could accept it. 

Nevertheless, MLG’s counsel hand-wrote MLG’s acceptance onto

the offer itself and filed a notice of acceptance with the trial 

court. Thereafter, the court entered judgment in favor of MLG

pursuant to section 998, subdivision (b)(1). 

Rabineau filed a motion to vacate the judgment under 

section 473, subdivision (d). He argued his section 998 offer was 

invalid because it lacked an acceptance provision. Consequently,

Rabineau contended, the judgment stemming from the offer’s

acceptance was void and should be set aside. The trial court

agreed and granted Rabineau’s motion. 

On appeal, MLG contends the trial court erred by vacating 

the judgment because its ruling: (1) lacks support in caselaw; (2) 

contradicts the policies and purposes underlying section 998; and 

(3) violates principles of contract law and equity. 

For the reasons discussed below, we conclude the trial court 

correctly found the judgment was void. Accordingly, we affirm. 

FACTUAL AND PROCEDURAL BACKGROUND

In November 2015, plaintiff Amir Mostafavi and his law 

firm, MLG, filed their operative complaint, which asserted a 

claim for defamation per se, among others, against Rabineau.

The case was litigated extensively over the next several years. 
4

Although the parties attended a mediation on May 28, 2019, they

were unable to settle. 

On May 31, 2019, Rabineau served MLG with a “Statutory 

Offer to Compromise” pursuant to section 998. The offer stated, 

in its entirety: “TO PLAINTIFF, MOSTAFAVI LAW GROUP, 

AND TO ITS COUNSEL OF RECORD: [¶] Pursuant to 

California Code of Civil Procedure §998 [sic], Defendant [sic], 

LAW OFFICES OF LARRY RABINEAU AND LARRY 

RABINEAU, offer to compromise the above-entitled action for the 

sum of $25,000.01. [¶] PLEASE TAKE NOTICE that if this Offer 

to Compromise is not accepted within the time specified by §998 

[sic] of the Code of Civil Procedure and Plaintiff fails to obtain a 

more favorable judgment, Plaintiff is not entitled to recover court 

costs (despite being a ‘prevailing party’) and must pay the 

offering defendants’ costs from the time of the offer.” (Italics and 

underlines in original.) 

On June 20, 2019, Mostafavi, acting as MLG’s counsel,

hand-wrote the following onto the section 998 offer: “Plaintiff 

Mostafavi Law Group, APC accepts the offer.” That same day, 

MLG filed a notice of the offer’s acceptance, along with proof 

thereof, with the trial court and sent a copy to Rabineau. After 

receiving MLG’s notice of acceptance, on June 21, 2019, Rabineau 

told MLG he would “draft and send . . . a settlement agreement 

for . . . signature” before paying the settlement amount. 

On June 28, 2019, the trial court entered judgment in favor 

of MLG pursuant to section 998.2 Three days later, MLG sent a 

2 Section 998, subdivision (b)(1) states: “If the offer is 

accepted, the offer with proof of acceptance shall be filed and the 

clerk or the judge shall enter judgment accordingly.”
5

copy of the judgment to Rabineau and requested “timely payment 

according to the judgment.” In response, Rabineau reiterated that 

before remitting payment, he “require[d] [MLG] to sign a 

settlement agreement,” under which “[e]ach party [would] bear 

[its] own fees and costs.”

Soon thereafter, the parties got into a dispute over whether

MLG could enforce the judgment, and thereby require Rabineau

to pay the amount set forth in the section 998 offer, even though 

it had not signed any proposed settlement agreement. When they 

were unable to resolve the matter, Rabineau filed a motion to set 

aside the judgment under section 473, subdivision (d).

3 He 

argued: “The [section] 998 [offer] [MLG] accepted did not have an 

acceptance provision and is therefore invalid. As such, the 

judgment that was entered pursuant to [MLG’s] acceptance of the 

[section] 998 [offer] is void.” Rabineau argued in the alternative 

that if the trial court found the offer was valid, it should amend 

the judgment to include both MLG and Mostafavi. On this point, 

Rabineau asserted MLG was Mostafavi’s alter ego, and that “[a]n 

absolute injustice would occur if the [trial court] finds the 

judgment for $25,000 against [Rabineau] valid and still permits

Mr. Mostafavi to proceed to trial” against him.

4

3 Section 473, subdivision (d) provides, in relevant part: “The 

court . . . may, on motion of either party after notice to the other 

party, set aside any void judgment or order.”

4 Mostafavi was both a plaintiff in his own right, and counsel 

for his law firm, MLG. Rabineau’s section 998 offer, however, was 

directed only to MLG, not Mostafavi. And the judgment was 

entered only in favor of MLG, not Mostafavi himself. Mostafavi is 

not a party to this appeal.
6

Following a hearing, the trial court granted Rabineau’s 

motion. Explaining the rationale behind its ruling, the court 

stated: “The Court notes that neither party cites to any case 

dealing with the situation where a defective section 998 offer was 

actually accepted. Therefore, without any authority to the 

contrary, the Court follows the rule as set forth in [Puerta v. 

Torres (2011) 195 Cal.App.4th 1267 (Puerta)]—‘the manner of 

acceptance must be indicated in the offer.’ [Citation.] Moreover, 

where a section 998 offer is found to be invalid, any portion of a

judgment that results from the section 998 offer is similarly 

invalid. [Citation.] Because the Judgment was entered pursuant 

to section 998, and in particular, Code of Civil Procedure section 

998, subdivision (b)(1), the Court finds that the Judgment is 

appropriately set aside as void.” (Footnotes omitted.) The trial 

court also rejected Rabineau’s contention that MLG was 

Mostafavi’s alter ego, noting it was not supported by sufficient 

evidence and “a number of the trial documents prepared by the 

parties in this case indicate that there was ambiguity on both 

sides as to who were the remaining parties in this matter.”

MLG timely appealed. 

DISCUSSION

I. Statutory Framework and Standard of Review

“Section 998 concerns pretrial offers to compromise.” 

(Puerta, supra, 195 Cal.App.4th at p. 1270.) The statute “was 

designed to encourage settlement of disputes through a 

straightforward and expedited procedure.” (Bias v. Wright (2002) 

103 Cal.App.4th 811, 819.) 

Pursuant to section 998, subdivision (b): “Not less than 10 

days prior to commencement of trial . . . , any party may serve an 
7

offer in writing upon any other party to the action to allow 

judgment to be taken or an award to be entered in accordance 

with the terms and conditions stated at that time. The written 

offer shall include a statement of the offer, containing the terms 

and conditions of the judgment or award, and a provision that 

allows the accepting party to indicate acceptance of the offer by 

signing a statement that the offer is accepted. Any acceptance of 

the offer, whether made on the document containing the offer or 

on a separate document of acceptance, shall be in writing and 

shall be signed by counsel for the accepting party[.]”

“If the offer is accepted, the offer with proof of acceptance 

shall be filed and the clerk or the judge shall enter judgment 

accordingly.” (§ 998, subd. (b)(1).) However, “[i]f an offer made by 

a defendant is not accepted and the plaintiff fails to obtain a 

more favorable judgment or award, the plaintiff shall not recover 

his or her postoffer costs and shall pay the defendant’s costs from 

the time of the offer.” (§ 998, subd. (c)(1).) The trial court also has 

discretion to “require the plaintiff to pay a reasonable sum to 

cover postoffer costs of the services of expert witnesses[.]” (Ibid.)

Where, as here, “the issue to be decided [on appeal] is 

purely one of statutory construction, the question is one of law 

subject to our de novo review. [Citation.]” (People v. Superior 

Court (Ortiz) (2004) 115 Cal.App.4th 995, 999, overruled on other 

grounds in People v. Watson (2007) 42 Cal.4th 822, 831.) 

II. Arguments Based on Caselaw and Policy

As noted above, section 998, subdivision (b) provides, in 

pertinent part: “The written offer shall include . . . a provision 

that allows the accepting party to indicate acceptance of the offer 
8

by signing a statement that the offer is accepted.” (Emphasis 

added.)

MLG concedes Rabineau’s section 998 offer “did not have 

any statement at all regarding acceptance,” and thus did not 

comply with the statutory language requiring an acceptance 

provision. Nevertheless, MLG maintains the judgment is valid 

and enforceable because the terms of the offer were clear and 

unambiguous and MLG accepted the offer in writing. In other

words, MLG appears to contend that because it accepted the offer 

in writing, the offer’s omission of an acceptance provision was 

harmless, as the “sole purpose” of requiring section 998 offers to 

contain such a provision is “to make it clear that written 

acceptance is required.” In support of its position, MLG 

emphasizes: (1) prior caselaw did not address the validity of a 

judgment following the acceptance of a section 998 offer lacking

an acceptance provision; and (2) section 998’s “goals of 

eliminating uncertainty, requiring written acceptance, and 

encouraging settlement would be defeated by a rule which voided 

the [judgment] where the offeree has communicated an 

unqualified, written acceptance of a clear and unambiguous 

offer.” 

Like MLG, we have not located any California appellate 

court decisions addressing the validity of a judgment stemming 

from acceptance of a section 998 offer lacking an acceptance 

provision. Nevertheless, we conclude the trial court’s ruling—that 

such a judgment is void—has ample support in existing caselaw

and accepted principles of statutory construction. 

In Puerta, the Court of Appeal addressed whether a section 

998 offer without an acceptance provision is valid for purposes of 

triggering the cost-shifting provisions set forth in section 998, 
9

subdivision (c). (Puerta, supra, 195 Cal.App.4th at p. 1269.) In 

resolving this issue, the court applied two “fundamental 

principles of statutory construction”: (1) where statutory 

language is clear and unambiguous, courts must give effect to its 

plain meaning; and (2) courts generally construe the word 

“shall” as mandatory. (Id. at pp. 1272-1273.) Based on those 

principles, the court held section 998, subdivision (b) “sets forth 

two mandatory requirements about what shall be included in a 

section 998 offer: the offer shall be written, and it shall contain 

a provision stating that the recipient can accept the offer ‘by 

signing a statement that the offer is accepted.’” (Id. at 

p. 1273.) The court concluded that because “[t]he offer at 

issue . . . contained nothing regarding acceptance, only the terms 

of the offer itself and its expiration date,” the offer was “invalid 

under the plain language of the statute[.]” (Ibid.)

California appellate courts have consistently followed 

Puerta to hold that a section 998 offer lacking an acceptance 

provision is invalid, and therefore an offeree’s failure to accept it 

does not trigger any of section 998’s cost-shifting provisions.5

(See, e.g., Perez, supra, 206 Cal.App.4th at p. 424 [defendant’s 

section 998 offer was invalid because “the plain language of the 

statute requires all offers to contain an acceptance provision”]; 

Boeken, supra, 217 Cal.App.4th at p. 1004 [“Because [plaintiff’s] 

section 998 offer did not include the required acceptance 

5 Section 998, subdivisions (c) and (e) govern cost-shifting 

where “an offer made by a defendant is not accepted and the 

plaintiff fails to obtain a more favorable judgment or award[.]” 

(§ 998, subds. (c) & (e)). Subdivision (d) applies where “an offer 

made by a plaintiff is not accepted and the defendant fails to 

obtain a more favorable judgment or award[.]” (Id., subd. (d).)
10

provision, the offer was invalid. [Citations.]”]; Bigler-Engler v. 

Breg, Inc. (2017) 7 Cal.App.5th 276, 331 [plaintiff was not 

entitled to costs under section 998 because her offer “did not 

include an acceptance provision” and “therefore did not comply 

with the statute”].) 

The trial court’s application of these cases—which involved 

rejection of a section 998 offer without an acceptance provision—

to this case—which involves acceptance of such an offer—is a 

logical extension of their holdings. It also is consistent with 

section 998’s language and structure. Section 998, subdivision (b) 

sets forth the mandatory requirements that an offer and 

acceptance must satisfy in order to be valid under the statute.

(See § 998, subd. (b).) When those requirements are met, 

subdivisions (b)(1) and (c) through (e) delineate the consequences 

that may follow depending on whether the offer is accepted (entry 

of judgment) or not (cost-shifting). (See id., subds. (b)(1) & (c)-(e).) 

If failure to accept an offer lacking an acceptance provision does 

not trigger the cost-shifting consequences set forth in 

subdivisions (c) through (e) (Puerta, supra, 195 Cal.App.4th at p. 

1273; Boeken, supra, 217 Cal.App.4th at p. 1004), then purported

acceptance of such a defective offer likewise cannot trigger the 

consequences in subdivision (b)(1) and give rise to an enforceable 

judgment. This is so because where a section 998 offer is invalid 

based on its failure to satisfy all of the “statutorily required 

elements[,] . . . there is nothing for the receiving party to accept” 

in the first place. (Perez, supra, 206 Cal.App.4th at p. 426.) 

This conclusion is supported by Saba v. Crater (1998) 62 

Cal.App.4th 150 (Saba). While Saba was based on a prior version 

of section 998 that did not require offers to include an acceptance 
11

provision, the opinion is instructive on the validity of a judgment 

stemming from the acceptance of a defective offer. (Id. at p. 153.)

In Saba, the defendant’s counsel made a section 998 offer

orally on the record at a deposition. (Saba, supra, 62 Cal.App.4th 

at p. 152.) After failing to obtain a formal written offer after the 

deposition, the plaintiff’s counsel served the defendant with a 

written acceptance and moved for entry of judgment pursuant to 

section 998, subdivision (b)(1). (Ibid.) The trial court found that 

“a valid section 998 offer had been made and accepted” and 

entered judgment in the plaintiff’s favor. (Ibid.) The Court of 

Appeal reversed, holding the judgment was defective because, 

among other things, the offer was not in writing as required by 

statute. (Id. at pp. 153-154.) Saba therefore demonstrates

acceptance of an offer that fails to comply with all of section 998’s 

requirements does not result in a valid judgment. (See ibid.) 

Additionally, we reject MLG’s contention that a rule 

requiring offers to include an acceptance provision in order to

give rise to an enforceable judgment under section 998, 

subdivision (b)(1) will defeat the statute’s goals of “eliminating 

uncertainty” and “encouraging settlement.” On the contrary, it is

an application of the “bright-line rule” articulated in Perez, which 

“require[s] the parties to comply with the provisions [of section 

998] the Legislature has deemed necessary” by “invalidating an 

offer when it omits an acceptance provision, or any other 

statutorily required provision[.]” (Perez, supra, 206 Cal.App.4th 

at pp. 425-426.) Contrary to MLG’s argument, we agree with the 

Perez court that adherence to this “bright-line rule will eliminate 

confusion and uncertainty” and “encourage settlements[.]” (Id. at 

p. 426.) Specifically, consistent application of this rule will ensure

parties can efficiently discern: (1) whether an offer extended or 
12

received is valid and capable of acceptance based on its 

compliance with all of section 998’s requirements; (2) the specific 

actions that must be taken to accept an offer, as defined by the 

offeror; and (3) the consequences that may flow from an offer’s

acceptance or rejection. Adopting a rule requiring section 998 

offers to include an acceptance provision to be valid, whether they 

are rejected or accepted, adds consistency and predictability to 

section 998’s operation. This may incentivize litigants to utilize 

this “straightforward and expedited procedure” to settle disputes 

before trial. (Bias v. Wright, supra, 103 Cal.App.4th p. 819.)6

III. Arguments Based on Contract Principles and Equity

A. Contract Principles

MLG contends we should apply “pure contract principles” 

to conclude the judgment is valid. Specifically, MLG argues that 

because Rabineau’s offer was “unambiguous” and its acceptance 

was “clear and unqualified,” the parties exhibited a “clear intent” 

to enter into a “binding agreement” for entry of judgment under 

section 998, subdivision (b)(1); consequently, it asserts, the 

6 We note that had Rabineau’s section 998 offer contained an 

acceptance provision, and had it been accepted in accordance 

with that provision, Rabineau could not have later conditioned 

payment of the settlement funds on MLG’s execution of a 

settlement agreement containing terms not specified in the offer, 

as he tried to do in this case. Rabineau’s attempt to introduce 

additional terms outside of the offer is inconsistent with the plain 

language of section 998, subdivision (b), which requires the offer 

itself to “contain[] the terms and conditions of the judgment or 

award.”
13

“resulting judgment is cannot [sic] be voided.” Put differently, 

MLG contends “pure contract principles” require the conclusion 

that the offer was valid and capable of giving rise to an 

enforceable judgment under section 998, notwithstanding its 

omission of an acceptance provision. We are not convinced. 

Our Supreme Court has acknowledged that, “[b]ecause the 

process of settlement and compromise is a contractual one, 

[general contract law] principles may, in appropriate 

circumstances, govern the offer and acceptance process under 

section 998. [Citation.]” (Martinez v. Brownco Construction 

Co. (2013) 56 Cal.4th 1014, 1020.) The Supreme Court has 

made clear, however, that these principles should not apply

where, as here, their “application would conflict with section 

998 . . . . [Citation.]” (Ibid.) Specifically, as the trial court 

correctly noted, application of general contract principles to 

conclude a section 998 offer is valid, even if it does not have an 

acceptance provision, would conflict with the language of section 

998, which clearly provides otherwise. (See § 998, subd. (b); see 

also Perez, supra, 206 Cal.App.4th at p. 424, fn. omitted [“The 

plain language of [section 998] requires all offers to contain an 

acceptance provision.”].) 

Additionally, relying on Civil Code section 1654, MLG 

contends we should conclude the offer was valid because 

Rabineau drafted it, and should be held responsible for any 

“ambiguity” regarding its validity. Section 1654 of the Civil Code 

states: “In cases of uncertainty not removed by the preceding 

rules, the language of a contract should be interpreted most 

strongly against the party who caused the uncertainty to exist.”

(Emphasis added.) This interpretive rule has no relevance here, 

however, as MLG does not point to any ambiguity in the terms of 
14

the offer which would require further construction. Indeed, as 

noted above, MLG asserts on appeal that the offer “was 

unambiguous.” 

B. Equity

Relying on “principles of . . . equity,” MLG contends the 

judgment should be enforced because to hold otherwise would 

allow Rabineau to unfairly benefit from his own “drafting errors” 

and “avoid the duties and consequences of [his] own offer based 

on a technical deficiency [he himself] created.” Again, we are not 

persuaded. 

As an initial matter, we note Rabineau acknowledges he 

made several errors in drafting the section 998 offer, including 

failing to include an acceptance provision and failing to direct the 

offer to both plaintiffs listed on the operative complaint. But we 

disagree with MLG’s conclusion that we should overlook 

Rabineau’s failure to comply with a statutory requirement based 

entirely on its view of what is fair. Instead, stare decisis and 

common tenants of statutory construction direct us to adhere to 

the clear statutory requirement of an acceptance provision 

“without regards to what occurred in this particular case or the 

tactics of a party.” (Boeken, supra, 217 Cal.App.4th at p. 1004). 

We “cannot ignore the . . . statute to achieve a more desirable 

result.” (Perez, supra, 206 Cal.App.4th at p. 424, italics omitted.)

Finally, MLG asserts Rabineau should be equitably 

estopped from challenging the validity of judgment. Arguably, 

this argument has been forfeited, as MLG did not raise it before 

the trial court. (See Bigler-Engler v. Breg, Inc., supra, 7 

Cal.App.5th at pp. 331-332.) In any event, because the judgment 
15

MLG seeks to enforce is the product of section 998, we are not 

convinced that the doctrine of equitable estoppel can be used to 

escape the statute’s requirements. Moreover, MLG has not shown 

the elements of equitable estoppel have been satisfied, as the 

record does not reflect Rabineau made any misrepresentations of 

material fact to MLG, or that MLG relied on any such 

misrepresentations to its detriment. (See Simmons v. Ghaderi 

(2008) 44 Cal.4th 570, 584 [application of equitable estoppel 

requires satisfaction of all of the following elements: “(a) a 

representation or concealment of material facts; (b) made with 

knowledge, actual or virtual, of the facts; (c) to a party ignorant,

actually and permissibly, of the truth; (d) with the intention, 

actual or virtual, that the ignorant party act on it; and (e) that 

party was induced to act on it. [Citation.]”].) 
16

DISPOSITION

The order vacating the judgment is affirmed. Respondents 

shall recover their costs on appeal. 

CERTIFIED FOR PUBLICATION

CURREY, J.

WE CONCUR:

WILLHITE, Acting P. J.

COLLINS, J.