998 Offers Do Not Have to Resolve All Claims, Only Those Involving the Offeror and Offeree.
Newport Psychcare v. Windstone Behavioral Health, Inc., Case No. G044449 (4th Dist., Div. 3 Jan. 31, 2012) (unpublished) concerned plaintiffs who rejected defendants’ respective CCP § 998 offers to pay some positive moneys ($91,000, $70,000, and $15,000) to certain parties and dismiss all of their cross-claims. Bad news, because plaintiffs won, but when all the applicable offsets and preoffer interest/fees were calculated, they still came below the 998 offers. That meant defendants were the 998 prevailing parties, a determination appealed by losing plaintiffs.
Justice Aronson, as author for a 3-0 panel, found the 998 prevailing party determination to be correct, even under a de novo standard of review because the facts were undisputed in nature.
The main infirmity in plaintiffs’ attacks was the failure to correctly value the judgment and the nature of the defense offers (including what preoffer fees and costs should be factored into gauging the nature of the 998 offers). Once offsets and preoffer interest/fees were calculated in the mix, the defense indeed did prevail. (If you need to see specifics on how this calculus works, the numbers are provided in an enlightening table by the appellate court.) The 998 offers were certainly definite in nature given that they did resolve the dispute between the impacted parties–the offers did not have to attempt resolution of disputes with others (folks other than the offerors and offerees).