And . . . 998 Offer Silence On Fees And Costs Resulted In Fee Recovery By Accepting Plaintiff Under Labor Code Section 218.5.
Briscoe v. The Painted Nail, Case No. B252066 (2d Dist., Div. 7 Aug. 20, 2014) (unpublished) illustrates how a CCP § 998 offeror needs to be careful in the drafting of the offer, making sure to include terms it wants—including a formal standard release document to be signed at a designated time before entry of judgment and a waiver of fees/costs. The failure to include these terms can mean the offeror does not accomplish what it/he/she intended.
In this one, defendants presented this 998 offer to plaintiff suing for employment termination retaliation and final paycheck transmittal delay: “Defendants . . . jointly offer to have judgment entered again them in favor of plaintiff in the amount of $25,000 pursuant to Section 998. Payment of such shall include a complete release and dismissal of all claims by plaintiff. This offer may be accepted pursuant to the terms and conditions of Section 998, and if not timely accepted, it is permanently withdrawn.” Plaintiff timely accepted the offer this way through a signed acceptance by plaintiff’s counsel alone: “Plaintiff hereby accepts defendants’ 998 offer to allow judgment to be entered in Plaintiff’s favor and against Defendant for the sum of $25,000.” The defense never asserted that the acceptance was noncompliant. However, the defense mailed a lengthy general release and dismissal document, which plaintiff refused to sign based on the contention it contained terms and conditions inconsistent with the 998 offer. The defense filed a motion to enter judgment under CCP § 664.6 or alternatively to vacate the judgment pursuant to § 473(b), with plaintiff filing a separate motion for attorney’s fees as the prevailing party. The trial court denied the defense motion on the grounds that (1) the defense had failed to show that the 998 offer was signed by the client, and (2) no excusable neglect had been established under § 473. Also, plaintiff was awarded attorney’s fees under Labor Code § 218.5.
The defense appeal did not succeed; and, because the fee award was affirmed, plaintiff could seek fees for winning on appeal.
The main problem was that the 998 offer did not qualify as a 664.6 settlement agreement because only plaintiff’s counsel signed—the absence of the client’s signature was fatal. Section 473 relief was properly denied because the statute “does not provide a safety valve against attorney malpractice.” Also, when a 998 offer is silent on fees, plaintiff was entitled to seek them given the “bright-line” rule that a 998 offer only excludes fee if it says so expressly. (Engle v. Coperbarger & Copenbarger, LLP, 157 Cal.App.4th 165, 169 (2007).)
The appellate court also believed that 998 offer was complied with—defense offered to have judgment entered against it, and judgment was so entered. Although agreeing that the defense was entitled to a Civil Code section 1542 release, neither side had identified the effect of a dismissal after entry of judgment for the plaintiff; put another way, the dismissal would have been superfluous.
BLOG UNDERVIEW—If you want to review a discussion of some terms which will and will not pass muster under 998 jurisprudence, see our prior post of July 2, 2014.