Court Opinion

ID: 9745177
Source: CourtListenerOpinion
Date Created: 2023-08-26 22:40:05.646199+00
Date Added: 2024-06-11T07:24:57.291795
License: Public Domain

SIMS, Acting P. J., Concurring and Dissenting.
I concur in parts L, II. and III. of the majority opinion.
I respectfully dissent from part IV., which affirms the trial court’s award of prejudgment interest and expert witness fees under Code of Civil Procedure section 998. (Undesignated statutory references are to the Code of Civil Procedure.) In my view, plaintiff’s section 998 offer (998 offer), which was served at the same time as the summons and complaint, was invalid. The majority’s contrary conclusion unfortunately adds another wicked slider to a plaintiff’s arsenal of hardball litigation tactics: serving a 998 offer with the summons and complaint.
In Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692 [241 Cal.Rptr. 108] (Elrod), this court stated: “[T]he section 998 mechanism works only where the offeree has reason to know the offer is a reasonable one. If the offeree has no reason to know the offer is reasonable, then the offeree cannot be expected to accept the offer.” (Id. at p. 699.)
In Wilson v. Wal-Mart Stores, Inc. (1999) 72 Cal.App.4th 382 [85 Cal.Rptr.2d 4], this court recognized the importance of insuring that a party served with a 998 offer be given a reasonable opportunity to evaluate the offer. In Wilson, the plaintiff served a 998 offer, in the amount of $150,000, early in the litigation. (Id. at p. 387.) The offer was not accepted and was deemed rejected. (Ibid.) Closer to trial the plaintiff served a second 998 offer in the amount of $249,000, which was also deemed rejected. (Ibid.) The jury’s verdict was for $175,000. (Ibid.)
The question before this court was whether the first 998 offer, for $150,000, remained valid. Applying traditional contract principles, we concluded the second 998 offer served to revoke the first offer. (Wilson v. *453Wal-Mart Stores, Inc., supra, 72 Cal.App.4th at p. 390.) But we also reasoned that allowing the first 998 offer to remain valid would not further the purpose of section 998, which is to encourage settlements. We said, “[T]here is an evolutionary aspect to lawsuits and the law, in fairness, must allow the parties the opportunity to review their respective positions as the lawsuit matures. The litigants should be given a chance to learn the facts that underlie the dispute and consider how the law applies before they are asked to make a decision that, if made incorrectly, could add significantly to their costs of trial.” (Wilson v. Wal-Mart Stores, Inc., supra, 72 Cal.App.4th at p. 390, italics added.)
I do not think defendant in this case was given a reasonable opportunity to evaluate plaintiff’s 998 offer, which was served with the summons and complaint.
I think a defendant should be entitled to complete minimal discovery before being expected to evaluate and respond to a 998 offer. In the present case, for example, I should think that a defendant should be entitled, at a minimum, to take the plaintiff’s deposition and to use formal discovery procedures to discover his medical specials from medical providers.
Yet, in this case, defendant was required to respond to plaintiff’s 998 offer within 30 days of service of summons and complaint—the same period of time in which defendant was obligated to answer the complaint. Thus, section 998, subdivision (b)(2), provides, “If the offer is not accepted prior to trial or arbitration or within 30 days after it is made, whichever occurs first, it shall be deemed withdrawn, and cannot be given in evidence upon the trial or arbitration.” (Italics added.) Thus, plaintiff’s 998 offer had to be accepted within 30 days of its service (at the same time as the summons and complaint) or else it was deemed withdrawn and could not thereafter have been accepted. (The period to respond to a complaint is 30 days; see § 412.20, subd. (a)(3).)
While it is technically true that a defendant can notice the deposition of the plaintiff as soon as the defendant is served with the summons and complaint (§ 2025.210, subd. (a)), I do not think it is a good idea to force defendants to jam basic discovery into the 30 days following service of the summons and complaint in order to respond to a 998 offer. As a practical matter, here is what typically has to happen within 30 days following service of a personal injury complaint upon a defendant: (1) The defendant has to deliver the summons and complaint to his insurance carrier; (2) A claims adjuster for the insurer has to review the allegations of the complaint with the insured; (3) The claims adjuster has to line up counsel for the defendant; (4) Defense counsel has to discuss the allegations of the complaint with the insured and prepare an answer.
*454Imagine, if you will, the litigation frenzy that will be produced if defense counsel must also take the plaintiff’s deposition and obtain medical specials during this 30-day period. Not to mention the retention of experts and obtaining opinions from them.
Why on earth do we want to do this?
The majority proffer arguments why plaintiff’s 998 offer was reasonable and valid in this case.
Thus, the majority assert “the parties had a close, semifamilial relationship, and there was free flow of information between them.” (Maj. opn., ante, at p. 450.) However, the “free flow” of information from plaintiff as to his damages was contained in a letter from plaintiff to defendant, which is not a part of the record. With respect, I do not think a defendant should be obligated to evaluate a $99,000 offer based on damages information supplied informally (not under oath) by a plaintiff or his attorney. Although plaintiffs’ attorneys are officers of the court, on rare occasions such attorneys have been known to inflate their client’s damages in demand letters written prior to discovery. In my view, a 998 offer approaching $100,000 can be reasonably evaluated only after basic discovery procedures (requiring responses under oath) have been used.
The majority also argue that “defense counsel may request that plaintiff provide informal discovery on the damage issue and/or allow an extension of time to respond to the demand.” (Maj. opn., ante, at p. 451.) As I have already explained, informal discovery is unsatisfactory. And section 998 provides no mechanism to obtain a court order extending the time to respond to a 998 offer. Defense counsel should not be at the mercy of plaintiff’s counsel’s charitable mood.
I can envision at least one scenario in which such service of a 998 offer would be reasonable. Imagine a scenario in which plaintiff files a lawsuit for personal injury; defendant answers; and discovery is conducted. But, on the eve of trial, plaintiff’s counsel, who is unprepared for trial, dismisses the lawsuit without prejudice. When plaintiff refiles that lawsuit, in my view, either plaintiff or defendant would act reasonably in serving a 998 offer as soon as defendant is served with the summons and complaint. The key is that the party receiving a 998 offer has had the opportunity for basic discovery.
In the instant case, I would conclude, following Elrod, supra, 195 Cal.App.3d 692 and Wilson v. Wal-Mart Stores, Inc., supra, 72 Cal.App.4th 382, that defendant did not have a reasonable opportunity to learn the facts and circumstances of plaintiff’s claim and, therefore, the 998 offer was invalid.
*455I would modify the judgment by excising the section 998 costs awarded to plaintiff and otherwise affirm the judgment as modified.