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Timestamp: 2019-04-20 21:03:10+00:00

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Appeal from a postjudgment order of the Superior Court of Orange County, Claude Whitney, Judge. (Retired judge of the Orange Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Affirmed.
Grassini & Wrinkle and Ronald Wrinkle for Plaintiff and Appellant.
Hillsinger, Forgey, Hurrell & Star, Darrell Forgey, John Aitelli; Greines, Martin, Stein & Richland, Kent L. Richland and Jens B. Koepke for Defendants and Respondents Children’s Hospital of Orange County Thrift Stores, Incorporated, and Children’s Hospital of Orange County.
Plaintiff Rebecca Burch is the victim of severe personal injuries resulting from the collision of her automobile with a truck driven by defendant Eddie Phillip Bretado. Bretado was employed by defendant Children’s Hospital of Orange County Thrift Stores, Incorporated (CHOC Thrift Stores), owned by defendant Children’s Hospital of Orange County (CHOC). Bretado was acting in the course and scope of his employment at the time of the accident. Defendant Westrux International, Inc., was the owner and lessor of the truck driven by Bretado.
Burch’s first amended complaint (the complaint) alleged several theories of liability against all four defendants. These theories included negligent maintenance and negligent entrustment of the truck owned by Westrux. In July 2000, Burch served an unapportioned settlement offer of $50 million on all defendants under Code of Civil Procedure section 998. (All further statutory references are to the Code of Civil Procedure unless otherwise specified.) Defendants did not accept Burch’s offer.
Burch moved for an award of expert witness costs in the amount of $68,016.44 and prejudgment interest in excess of $4 million under section 998 and Civil Code section 3291, respectively. The trial court denied Burch’s motion. Burch appealed the trial court’s order as to CHOC Thrift Stores and CHOC only. We hold Burch’s section 998 offer was not valid because it was not apportioned among defendants and, as of the time of the offer, under the pleadings, defendants could have been found liable, but not jointly and severally liable for the full amount of the judgment under the permissive user doctrine and Proposition 51.1 Therefore, we affirm the denial of Burch’s motion seeking prejudgment interest under Civil Code section 3291 and expert witness costs under section 998.
Defendants contend the offer was invalid because it was “conditional” and Burch did not obtain a more favorable result at trial because the jury’s award included an award of future noneconomic damages not discounted to present value. In view of our holding, we do not reach these arguments.
On February 3, 1999, Burch was severely injured after her car was hit by a truck owned by Westrux. The truck was leased by Westrux to CHOC Thrift Stores and driven at the time by Bretado during the course of his employment with CHOC Thrift Stores.
Burch filed the complaint against CHOC Thrift Stores, CHOC, Bretado, and Westrux on February 3, 2000. The complaint contained a single cause of action for negligence and alleged: (1) “defendants, and each of them, were the agents, servants, employees, successors-in-interest, joint venturers, and assigns, each of the other, and at all times pertinent hereto were acting within the course and scope of their authority as such agents, servants, employees, successors, joint venturers, and assigns”; (2) defendants “were the owners, operators, lessees, and lessors of a certain International truck, and at all times herein mentioned, were driving said vehicle with the knowledge, permission, and consent, each of the other”; and (3) on February 3, 1999, defendants “so negligently, carelessly, recklessly, and unlawfully owned, drove, maintained, operated, entrusted, and controlled their said vehicle so as to cause it to collide with and crash into the vehicle driven by plaintiff, thereby directly and legally causing the injuries and damages to plaintiff as herein after enumerated.” Thus, among other allegations, the complaint alleged theories of negligent maintenance and negligent entrustment against Westrux as well as the other defendants.
On February 14, 2000, CHOC Thrift Stores, CHOC, and Bretado filed their answer to the complaint. Westrux filed its answer on March 31.
On July 24, 2000, Burch served all four defendants with a statutory offer to compromise under section 998. Burch’s offer stated as follows: “TO DEFENDANTS CHILDREN’S HOSPITAL OF ORANGE COUNTY THRIFT STORES, INCORPORATED, CHILDREN’S HOSPITAL OF ORANGE COUNTY, EDDIE PHILIP BRETADO, AND WESTRUX INTERNATIONAL, INC., AND TO THEIR ATTORNEYS OF RECORD: [¶] Plaintiff, REBECCA A. BURCH, an incompetent person, by Jeffrey N. Burch, her guardian ad litem, offers to have judgment taken against defendants CHILDREN’S HOSPITAL OF ORANGE COUNTY THRIFT STORES, INCORPORATED, CHILDREN’S HOSPITAL OF ORANGE COUNTY, EDDIE PHILIP BRETADO, and WESTRUX INTERNATIONAL, INC., and for herself in the above entitled action pursuant to section 998 of the Code of Civil Procedure for the sum of FIFTY MILLION DOLLARS ($50,000,000.00), each party to bear their own costs and attorneys’ fees. [¶] If you accept this offer, please file the offer and notice of acceptance in the above-entitled action prior to trial or within thirty (30) days of service of this offer, whichever occurs first, or it will be deemed withdrawn.” Burch’s offer expired before any defendant accepted.
Approximately 10 months later and before trial, in May 2001, all four defendants admitted liability. At trial, defendants stipulated that Westrux and Bretado were the agents of CHOC Thrift Stores and CHOC and thus stipulated to joint and several liability among defendants.
The case was tried to a jury on the issue of damages only. The jury returned a verdict awarding Burch damages as follows: $1,488,361.40 in past economic damages; $25,150,831 in present cash value of future economic damages; and $25 million in undiscounted past and future noneconomic damages. Judgment was entered in favor of Burch and against defendants, “jointly and severally,” for $51,639,192.40.
Burch filed a motion for an award of prejudgment interest in the amount of $4,272,612.63 and expert witness costs in the amount of $68,016.44. The motion was made on the ground that Burch served a statutory offer to compromise under section 998 which was not accepted by defendants, and the judgment entered in Burch’s favor exceeded the section 998 offer. Defendants opposed Burch’s motion, arguing the section 998 offer was invalid because it did not inform each defendant of what each defendant must pay to settle the case, it constituted an unapportioned offer to multiple defendants, and the vicarious liability exception, explained below, did not apply.
Burch appealed the trial court’s order as to defendants CHOC Thrift Store and CHOC only.
I. Standard of Review and Burden of Proof.
II. Section 998 and Civil Code Section 3291.
III. Unapportioned Section 998 Offers to Multiple Defendants.
The following three cases have considered the validity of unapportioned lump sum settlement offers under section 998 to multiple defendants: Taing, supra, 9 Cal.App.4th 579; Bihun, supra, 13 Cal.App.4th 976; and Steinfeld v. Foote-Goldman Proctologic Medical Group, Inc. (1996) 50 Cal.App.4th 1542 (Steinfeld).
IV. Was Burch’s Unapportioned Section 998 Offer to Defendants Valid?
The parties agree (1) Burch served an unapportioned section 998 offer jointly to all four defendants, offering to settle the case for $50 million; (2) defendants never accepted Burch’s offer; and (3) approximately 10 months later at trial, defendants stipulated to joint and several liability. Was Burch’s section 998 offer valid, warranting an award of expert witness costs and prejudgment interest? Based on the following analysis, we conclude it was not.
A. We determine the validity of Burch’s section 998 offer as of the date it was served and not as of the date of judgment.
As of the time Burch served her section 998 offer on defendants, defendants had not stipulated to joint and several liability in the case. Burch argues that defendants’ confidential mandatory settlement conference brief dated July 12, 2000 stated, “Defendants are admitting for the purposes of the MSC liability. As to apportionment, such is not being advanced at this time.” For policy reasons honoring adherence to the confidentiality of such documents, we do not consider the confidential mandatory settlement conference statement or brief. But even if considered, by its terms, this statement by defendants does not constitute an admission of joint and several liability.
Defendants did not admit joint and several liability until trial — approximately 10 months after Burch served her offer. When Burch served the section 998 offer, defendants had filed answers which contained general denials of the allegations contained in the complaint and several affirmative defenses. Thus, we consider the complaint and defendants’ answers as of the date of service of the section 998 offer to objectively determine whether defendants could be found not jointly and severally liable to Burch, if liable at all.
Burch argues we should ignore the fact Westrux was a party to the case at the time of the offer because Westrux is not a party to this appeal. We consider the validity of the offer as of the date it was served. Westrux was a party to the case at that time and was an offeree of the section 998 offer.
Unlike the present case, in Lakin v. Watkins Associated Industries, supra, 6 Cal.4th 644, the issue of an unapportioned offer to multiple defendants was not before the court. In Lakin, the plaintiff’s section 998 offer was served on the defendant truck company only and involved a personal injury action against the truck company and its driver.
B. Under the complaint, defendants could have been found not jointly and severally liable to Burch for the full amount of the judgment.
The complaint suggested Westrux owned the truck that collided into Burch’s vehicle — “a certain International truck.” Westrux’s liability could have been based only on its role as the owner/lessor of the truck in question, and not on Burch’s allegations that Westrux had any other liability under the doctrine of respondeat superior or vicarious liability. In that event, and under the permissive user doctrine, Westrux’s liability would have been statutorily limited to $15,000 per injury, $30,000 per occurrence, and $5,000 for property damages (Veh. Code, § 17151, subd. (a)) and Westrux would not have been found jointly and severally liable with the other defendants for the full amount of Burch’s damages. The theories pleaded in the complaint allowed such findings.
Based on the allegations of the complaint, the trier of fact also could have determined Westrux’s culpability was limited to negligent maintenance of the truck that hit Burch’s vehicle. Such a scenario gives rise to comparative negligence liability and triggers Proposition 51, whereby a defendant’s liability for noneconomic damages based on principles of comparative fault “shall be several only and shall not be joint.” (Civ. Code, § 1431.2, subd. (a).) Burch argues that “other than a boilerplate reference in its answer, CHOC never raised the defense of Prop 51. Prop. 51 played no role whatsoever in the underlying litigation.” The “boilerplate reference” referred to was the affirmative defense contained in defendants’ answers to the complaint which states: “Liability for the amount of non-economic damages should be allocated to this answering defendant in direct proportion of their percentages of fault, if any, according to California Civil Code, Section 1431.et seq.” This affirmative defense had raised Proposition 51 as an issue as of the date Burch served her section 998 offer.
The complaint alleged facts supporting an award of noneconomic damages, and the jury awarded Burch noneconomic damages. The complaint alleged, “As a direct and legal result of the acts and omissions of the defendants, and each of them, plaintiff . . . suffered . . . severe fright, shock, pain, discomfort, and anxiety.” In Bihun, supra, 13 Cal.App.4th 976, the employer defendant was either liable jointly and severally, or not liable at all. In contrast, under the complaint here, the trier of fact could have concluded all defendants were liable, but not jointly and severally liable to Burch.
Relying on several out-of-state cases and Santantonio v. Westinghouse Broadcasting Co., supra, 25 Cal.App.4th 102, Burch contends there was a “‘unity of interest’” among defendants because they “filed a joint answer, had the same lawyer, filed joint pleadings, jointly referred to themselves as ‘CHOC,’ made a joint offer to the plaintiff, and were ‘lumped together in the complaint.’” But Westrux filed its own answer to the complaint separate from the other defendants. Most significantly, defendants were sued on theories by which they could be found liable, but not jointly and severally liable for the full amount of the judgment. Santantonio v. Westinghouse Broadcasting Co. is distinguishable because it involved an apportioned offer to multiple plaintiffs.
Based on this analysis, we conclude the trial court properly ruled that Burch’s section 998 offer was not valid and denied recovery of prejudgment interest and expert witness costs. We therefore need not decide whether Burch’s section 998 offer was invalid because it was “conditional” or whether the judgment awarded to Burch was more favorable than the section 998 offer.
The postjudgment order is affirmed. CHOC Thrift Stores and CHOC shall recover their costs on appeal.
1 Cases and treatises use the words “valid,” “effective,” and “sufficient” interchangeably to describe whether section 998 penalties are triggered. We use the word “valid” to avoid confusion because most courts have used that term in this context.

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