First District, Division 2 Finds Admissions in Case Management Conference Statement Established Vicarious Liability For Gauging 998 Offer’s Validity.
Here is one for you personal injury practitioners, whether representing plaintiffs or defendants.
Although unapportioned Code of Civil Procedure section 998 offers are usually taboo, a prime exception occurs where the defendants are jointly and severally liable for the plaintiff’s damages under the doctrine of respondeat superior or other vicarious liability theories. (Bihun v. AT&T Information Systems, Inc., 13 Cal.App.4th 976, 1000-1001 (1993), disapproved on other grounds in Lakin v. Watkins Associated Industries, 6 Cal.4th 644, 664 (1993).) However, apportionment may be necessary in multiple defendant cases where liability of the defendants may vary due to the application of comparative negligence principles and Proposition 51, which provides that each defendant has only several liability for noneconomic damages in proportion to that defendant’s degree of wrongdoing. (Taing v. Johnson Scaffolding Co., 9 Cal.App.4th 579, 584-586 (1992).)
In Martin & Gillis & Lane, Case Nos. A125661/A125931 (1st Dist., Div. 2 Feb. 18, 2010) (unpublished), plaintiff sued both an employee and employer for motor vehicle accident injuries, alleging employment/agency theories as well as independent liability based on permissive use/negligent entrustment. However, employer filed a case management conference statement in court conceding that employee was driving the truck for employer within the course and scope of his employment at the time of the accident. Plaintiff made an unaccepted 998 offer for $199,999.99 to both defendants (although unapportioned), and then beat the offer by 1 cent—obtaining a jury award of $200,000 against employer (because employee was dismissed prior to trial). The lower court awarded plaintiff expert fees and costs of $62,388.80 based on the 998 offer (striking or taxing $28,632 in requested fees and costs). Employer appealed.
The fees/costs award was affirmed in a very instructive opinion in this area authored by Acting Presiding Justice Haerle on behalf of a 3-0 panel of the First District, Division 2—finding the 998 offer terms were undisputed such that de novo review was appropriate.
Employer’s primary challenge was that the unapportioned 998 offer was invalid because the complaint alleged both joint and several and independent liability theories against it, such that the offer was not particularized enough for reasoned evaluation by employer.
The Court of Appeal did recognize a split in opinion on 998 offer validity when the allegations of a complaint have pled alternative theories of recovery. (Compare Steinfeld v. Foote-Goldman Proctologic Medical Group, Inc., 50 Cal.App.4th 1542, 1550 (1996) [unapportioned offer valid under 998] with Burch v. Children’s Hospital of Orange County Thrift Stores, Inc., 109 Cal.App.4th 537, 540-541, 548-551 (2003) [different result where the defendant had not admitted joint and several liability and agency allegations found not dispositive against vehicle owner].) Nonetheless, the panel in Martin ruled it did not need to resolve this split in opinion because employer here admitted in their case management conference statement that it was vicariously liable for employee’s conduct. Even though employer balked at the idea that statements in the conference statement were binding, the appellate court strongly disagreed. “However, Gillis has cited no authority supporting its suggestion that a party may simply ignore (and may require the court and opposing parties to ignore) statements the party has made on important liability issues in a case management statement.” (Slip Opn., p. 10.)
The appellate panel found that the negligent entrustment theory did not alter the result, given that these allegations could only have imposed additional liability on employer, the owner and alleged entrustor of the vehicle. Employer would still have been liable for all of plaintiff’s damages, according to the Court.
“[W]e conclude that where, as of the date an unapportioned section 998 offer is served, a defendant faces either sole liability or joint and several liability for all amounts sought by the plaintiff, the offer is ‘sufficiently specific’ to support an award of expert fees and costs and prejudgment interest against that defendant, under section 998 and Civil Code section 3291.” (Slip Opn., p. 12.)
BLOG UNDERVIEW—Aside from the interesting 998 offer discussion in the personal injury area, this case counsels practitioners to be very careful in what statements and representations are made in filed case management conference statements. You will be held to them by both lower and appellate courts if this opinion is representative of the judicial perspective on the impact of such statements.