Court Opinion

ID: 7803705
Source: CourtListenerOpinion
Date Created: 2022-08-25 23:01:31.373031+00
Date Added: 2024-06-11T16:29:42.407172
License: Public Domain

Filed 8/25/22
                      CERTIFIED FOR PUBLICATION
       IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                         FIRST APPELLATE DISTRICT
                                DIVISION FOUR

 SAYS SIRI,
         Plaintiff and Appellant,              A161923

 v.                                            (Napa County
 SUTTER HOME WINERY, INC.,                     Super. Ct. No. 26-59035)
         Defendant and Appellant.

       Says Siri appeals from a judgment of dismissal entered after the trial
court granted a motion by Sutter Home Winery, Inc., doing business as
Trinchero Family Estates (Trinchero) to enforce a settlement agreement
pursuant to Code of Civil Procedure section 998 (section 998). Siri contends
the judgment must be reversed because the court exceeded its authority by
purporting to adjudicate whether the parties’ offer and acceptance formed a
binding agreement. While it may be that in an appropriate procedural context
the formation of a binding settlement agreement can be established–—an
issue we do not decide—the trial court erred in holding that such an
agreement had been reached pursuant to the procedures of section 998.
Therefore, the judgment of dismissal must be reversed.
                       Factual and Procedural History
       This is the second appeal in this case; our opinion in Siri v. Sutter Home
Winery, Inc. (2019) 31 Cal.App.5th 598 sets forth the underlying facts and
procedural history. For present purposes, suffice it to say that the prior
decision enabled Siri to pursue a cause of action against her former employer
Trinchero for wrongful termination in violation of public policy. On remand,

                                        1
in October 2019, Trinchero served an offer to compromise pursuant to
section 998. The offer was to pay Siri $500,000 in exchange for her dismissal
with prejudice of all claims. The offer stated that it “may be accepted by
signing the below Notice of Acceptance,” and it was accompanied by a page so
captioned, with signature lines for Siri and her lawyer.
      During the 30-day period in which Trinchero’s section 998 offer
remained in effect, the parties’ lawyers communicated about whether Siri’s
potential acceptance would trigger a right to prejudgment interest.1 Siri had
served Trinchero with a section 998 offer for $499,999 at the outset of
litigation in 2012, which had not been accepted, and Siri claimed that her
acceptance of Trinchero’s 2019 offer for a higher sum would trigger the cost-
shifting provisions of Civil Code section 3291,2 entitling her to recover

      1
          In support of its motion to enforce the settlement, Trinchero offered
evidence of those discussions, to which Siri objected based on Evidence Code
section 1152. (Ibid. [“Evidence that a person has, in compromise . . . offered
. . . to furnish money . . . to another who . . . claims that he or she has
sustained . . . loss or damage, as well as any conduct or statements made in
negotiation thereof, is inadmissible to prove his or her liability for the loss or
damage.”].) The trial court sustained Siri’s objection, in a ruling from which
Trinchero has filed a purported cross-appeal. Rulings on evidentiary
objections, however, are not appealable (Dabney v Wilhelm (1923) 190 Cal.
340, 340–341), so the purported cross-appeal must be dismissed. Nonetheless,
were the excluded evidence relevant to the disposition of Siri’s appeal, the
merits of the ruling could be considered in that connection. Trinchero did not
seek to use the challenged evidence for the purpose forbidden by Evidence
Code section 1152, so the disputed ruling was erroneous, as Trinchero argues
and Siri does not dispute. Thus, we briefly describe that evidence, although for
the reasons indicated in text, the erroneously excluded evidence has no
bearing on the outcome of this appeal.
      2 Under that statute, if a plaintiff in a personal-injury action serves a
section 998 offer that a defendant does not accept, and the plaintiff later
obtains a more favorable judgment, the judgment will bear interest at
10 percent per year from the date of the offer. (Civ. Code, § 3291.)

                                        2
prejudgment interest of approximately $379,000. Trinchero’s lawyer
maintained that Siri’s acceptance of the offer would not result in a judgment
in her favor or entitle her to prejudgment interest. Siri apparently indicated
she would accept the offer if amended to allow her to move for prejudgment
interest and “let the chips fall where they may.” Two days after Trinchero
advised that it would not modify the offer, Siri served, but did not file,
“objections” to the section 998 offer, contending it was defective because it did
not address the availability of pre- or postjudgment interest on the proposed
$500,000 payment.
      Five days later, Siri’s lawyer served a document titled “Notice of
Conditional Acceptance of [Trinchero’s section] 998 Offer.” It stated, “Subject
to clarification by the court in regard to [Siri’s section] 998 offer dated May
12, 2012, entitling her to prejudgment interest, and subject further to
clarification by the court in regard to the scope of [Trinchero’s section] 998
offer dated October 29, 2019, and clarification in regard to entry of the
proposed judgment tendered by [Siri], [Siri] gives formal notice of her
conditional acceptance of [Trinchero’s section] 998 offer to compromise, in the
amount of $500,000, dated October 29, 2019.”
      The next day, Siri filed the objections to Trinchero’s section 998 offer
that she had served a week earlier, together with a motion asking the court
to enter a judgment in her favor that would be “consistent with [her]
conditional acceptance” and include prejudgment interest. Soon afterward,
Trinchero filed a “Notice of Plaintiff’s Acceptance of [Section] 998 Offer.” The
notice, to which a copy of the conditional acceptance was attached, stated that
“Although [Trinchero] does not waive any right to file an opposition to
separately respond to the substantive issues raised in [Siri]’s motion
requesting entry of judgment pursuant to . . . section 998, . . . , [Trinchero]

                                         3
notes [that] the ‘conditions’ [Siri] addresses in the motion and partially sets
forth in her acceptance of [Trinchero]’s [section] 998 offer are simply requests
that the court clarify post-resolution questions.” Trinchero requested that the
court “vacate the trial date and all related deadlines . . . , pending entry of
the dismissal of the action with prejudice, while retaining jurisdiction to hear
[Siri]’s motion ” The court did so.
      Subsequently, the court issued a minute order denying Siri’s motion for
entry of judgment. The court reasoned that if Siri had accepted the section
998 offer, she would not be entitled to an order entering judgment in her
favor, but would be obliged to dismiss her claims with prejudice, which she
had not done. The court noted that issues regarding the effect of Siri’s
“conditional acceptance,” and whether the parties had entered a binding
settlement, were not yet before it.
      Thereafter, Trinchero filed a motion pursuant to section 998 to enforce
the purported settlement agreement, supported by a declaration from its
lawyer describing her negotiations with plaintiff’s lawyer. Siri filed an
opposition and evidentiary objections. The court sustained the objections but
granted the motion.
      In its minute order, the court found that Siri’s service of her conditional
acceptance created a binding settlement, while adding that its finding was
supported by Trinchero’s notice of acceptance. The court quoted that notice’s
observation that “the conditions [Siri] . . . sets forth in her acceptance . . . are
simply requests that the court clarify post-resolution questions,” and noted
that Siri “did not object to any aspect of the notice of acceptance, including its
characterization of the apparent meaning of [her] acceptance.” The court held
that despite its title, the “conditional acceptance” was absolute: “While [Siri]
uses the term ‘conditional,’ the court finds no conditions set forth in [her]

                                          4
acceptance. Rather, that document’s plain language simply makes the
acceptance subject to the court’s determination of three specific issues.
Importantly, the Siri acceptance does not condition acceptance on any
particular finding by the court. Put another way, it is not made subject to the
court’s making any specific finding on any of the three issues. Rather, it is
simply subject to the court’s ongoing authority to hear those issues.”
      The court declined Trinchero’s request to rule that Siri was not entitled
to prejudgment interest, instead making a “limited” finding that Siri “accepted
[Trinchero]’s [section] 998 offer[,] creating a binding settlement agreement”
that required Trinchero to make a payment of $500,000 “in consideration for
and conditioned upon [Siri]’s dismissal, with prejudice, of all claims brought
. . . in [this] matter.” The court scheduled a hearing on an order to show cause
regarding dismissal.
      Siri then filed a motion seeking pre- and postjudgment interest. The
court denied her request, in an order Siri does not challenge on appeal. The
court entered a judgment of dismissal, and Siri filed a timely notice of appeal.
                                   Discussion
      Section 998 states that “any party may serve an offer in writing upon
any other party to the action to allow judgment to be taken in accordance
with the terms and conditions stated at that time. . . . [¶] (1) 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).) Subdivisions (c)
through (f) of section 998 specify the consequences of failing to accept a valid
section 998 offer if the offeree does not ultimately obtain a more favorable
outcome, shifting certain litigation costs to the offeree. Subdivision (b) states
that an offer under its provisions must contain the terms and conditions of
the proffered judgment “and a provision that allows the accepting party to

                                         5
indicate acceptance of the offer by signing a statement that the offer is
accepted.” The acceptance must be in writing, signed by counsel for the
accepting party (or the party if not represented by counsel). (Ibid.) “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).)
      The process of making and accepting offers pursuant to section 998 is
contractual in nature. General principles of contract law apply insofar as
“such principles neither conflict with nor defeat [the statute’s] purpose.”
(T.M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273, 280.) We review
de novo the court’s legal conclusions. (Serafin v. Balco Properties Ltd., LLC
(2015) 235 Cal.App.4th 165, 173; Whatley-Miller v. Cooper (2013)
212 Cal.App.4th 1103, 1113.)
      To form a binding settlement, an offeree’s acceptance of a section 998
offer must be “ ‘absolute and unqualified.’ ” (Bias v. Wright (2002)
103 Cal.App.4th 811, 820, quoting Civ. Code, § 1585; Gray v. Stewart (2002)
97 Cal.App.4th 1394, 1397.) A qualified or conditional acceptance does not
form a contract, but constitutes a counteroffer. (Civ. Code, § 1585.) At
common law, such a counteroffer terminates the offer; in the section 998
context, however, the statute’s pro-settlement purpose dictates that a
counteroffer does not terminate a section 998 offer but leaves the offer in
effect until it expires or is revoked. (Poster v. Southern Cal. Rapid Transit
Dist. (1990) 52 Cal.3d 266, 272.)
      Because an effective acceptance must be absolute and unqualified, Bias
concluded that under section 998 the court lacks authority to adjudicate any
disputes about its meaning. (Bias v. Wright, supra, 103 Cal.App.4th at
pp. 821–822.) On that view, if an acceptance is not so unqualified that it may
be filed and judgment entered as a ministerial matter, the purported

                                        6
acceptance is necessarily ineffective. Whether or not the court lacks any
authority to resolve ambiguities in such a document, which we need not
decide, it is clear that the acceptance here was conditional, as it states, and
therefore not an effective acceptance of the section 998 offer.
      Trinchero’s offer was to pay $500,000 “in full and complete settlement
of [Siri’s] claims in this action.”3 Siri’s “conditional acceptance” stated,
“Subject to clarification by the court in regard to [Siri’s section] 998 offer
dated May 12, 2012, entitling her to prejudgment interest, and subject
further to clarification by the court in regard to [two other issues], [Siri] gives
formal notice of her conditional acceptance of [Trinchero’s] section 998 offer
. . . .” Even assuming that the trial court correctly rejected Siri’s suggestion
that this ambiguous condition required the court to award her prejudgment
interest, the acceptance was nonetheless conditioned on her right to pursue
“clarification” of three issues, including her asserted right to recover
prejudgment interest, with the possibility that the court might award such
interest.
      Had the section 998 offer been accepted without qualification, the
action would have been dismissed without any further proceedings and the

      3 The offer stated, “[Trinchero] offers to resolve completely this matter
on the following terms: [¶] (1) “[Trinchero] shall make payment to [Siri] in
the total sum of [$500,000], in full and complete settlement of her claims in
this action, including the remaining cause of action for wrongful termination
in violation of public policy, to be inclusive of all potential economic and non-
economic damages arising therefrom, as well as reasonable costs incurred as
of the date of this offer. [Siri] shall bear her own attorneys’ fees . . . ; and, [¶]
(2) This offer is further conditioned upon the dismissal, with prejudice, of all
claims brought by [Siri] against [Trinchero] . . . . [¶] [Trinchero] makes this
offer as a compromise of litigation; [Trinchero] does not admit liability in
doing so. This offer may be accepted by signing the . . . notice of acceptance”
(boldface omitted)

                                          7
possibility that the court might award interest would have been foreclosed.
Trinchero’s offer was to pay $500,000 without having to risk, among other
things, the possibility of being required to pay more. Its offer did not assume
the risk that the court, exercising its “ongoing authority to hear those issues,”
might award prejudgment interest on top of the $500,000 offered “in full and
complete settlement of [Siri’s] claims.” That the court ultimately denied Siri’s
request for prejudgment interest does not change the fact that the section 998
offer effectively required Siri to abandon any request for such interest, and
that her conditional acceptance effectively rejected that element of the offer
with a counteroffer that would enable her to make such a request.
      Thus, Siri’s “conditional acceptance” was precisely that—an
“acceptance” conditioned on the addition of new terms to the bargain
proposed in the section 998 offer. Although those terms involved only the
right to have the court consider certain arguments that the court ultimately
rejected, they still were additional terms that made the “conditional
acceptance” conditional. The acceptance thus did not create a binding
settlement enforceable under section 998.4 The court erred in ruling that it
did, and the judgment dismissing the action must be vacated.
      Nonetheless, we do not preclude the possibility that an enforceable
settlement agreement may be found to exist utilizing procedures other than
section 998. Treating Siri’s conditional acceptance as a counteroffer that

      4
        Trinchero cites Prince v. Invensure Ins. Brokers, Inc. (2018)
23 Cal.App.5th 614 for the proposition that parties’ communications about a
section 998 offer while the offer is pending can “clarify” an otherwise
ambiguous offer, rendering the offer valid, so that its rejection entitles the
offeror to post-offer costs. Even if that view is correct, it is inapplicable here.
Siri’s “Conditional Acceptance” was not ambiguous in a respect clarified by
subsequent discussions. The “Conditional Acceptance” added a condition to
an unambiguous offer that had not included any such condition.

                                         8
Trinchero accepted by agreeing to have the court rule on Siri’s motion for an
award of interest, the court might find that an enforceable settlement
agreement had been reached. (See Levy v. Superior Court (1995) 10 Cal.4th
578, 585 & fn. 3 [identifying methods of enforcing settlement agreements].)
Such an issue is not now before us; we hold only that Siri’s conditional
acceptance did not create an agreement enforceable under section 998.
                                 Disposition
      On Siri’s appeal, the judgment of dismissal is reversed and the matter
is remanded for further proceedings consistent with this opinion. Trinchero’s
purported cross-appeal is dismissed for lack of jurisdiction. The parties shall
bear their respective costs on appeal.

                                             POLLAK, P. J.

WE CONCUR:

STREETER, J.
GOLDMAN, J.

                                         9
Trial court:                           Napa County Superior Court

Trial judge:                           Honorable Monique Langhorne

Counsel for plaintiff and appellant:   BENEDON & SERLIN, LLP
                                       Kelly Riordan Horwitz
                                       Kian Tamaddoni

Counsel for defendant and appellant:   LITTLER MENDELSON, P.C.
                                       Constance E. Norton
                                       Lisa Lin Garcia
                                       Amelia A. McDermott

                                        10