Fact that Defense Verdict Ultimately Resulted Did Not Change the Analysis.
Here is an interesting unpublished decision in the CCP § 998 area, reinforcing that courts will take a pragmatic approach to gauging “reasonableness” of a 998 offer at the time that it was made–not by hindsight after an “iffy” defense verdict in a case with potentially significant exposure at the time of the offer.
Nunes v. Ruder, Case Nos. F059191/F059723 (5th Dist. Dec. 29, 2011) (unpublished) was a medical malpractice case involving a plaintiff patient who was referred to a physician after he felt a pain in his chest while exercising. Defendant doctor told him he did not have significant coronary artery disease and needed no follow up unless something else developed. Plaintiff died six weeks later due to complications related to severe coronary artery disease. Although plaintiff’s survivors sued the doctor, the jury returned a defense verdict.
However, almost a year earlier than the defense verdict, defendant served a 998 offer indicating he would waive costs/malicious prosecution action rights in exchange for a “with prejudice” dismissal of the action–an offer made before expert depositions were taken and after plaintiffs had the two opinions of two well-qualified cardiologists that defendant’s treatment was negligent. The lower court granted defendant costs in excess of $100,000, with over $97,000 being defense expert witness fees, based on the rejected 998 offer.
Plaintiff appealed and did gain a reversal of the costs award as a matter of law.
The problem with the costs award was that the defense 998 offer was made way too early, in essence. Plaintiff had no expectation that it would not recover a substantial award (with the defense estimating that any recovery would be at least $300,000 to plaintiff’s estimate of over $1.6 million) at the time of the offer–with a 998 offer to be evaluated based on circumstances when the offer was made. In fact, some case law indicated that a similar “token” offer was not reasonable where it could be inferred that the sole purpose was to make the defense eligible for recovery of large expert witness fees with no real risk as far as owing anything to plaintiff. (Pineda v. Los Angeles Turf Club, Inc., 112 Cal.App.3d 53, 64 (1980); Wear v. Calderon, 121 Cal.App.3d 818, 821 (1981).) Jones v. Dumrichob, 63 Cal.App.4th 1258, 1261, 1263-1264 (1998) did not dictate a different result, because the facts in Nunes showed liability was a close call (not really at issue in Jones) and the developed record did show substantial damages were in play (not present in Jones).