Second District, Division 1 Finds Nothing Amiss About Substantial Costs Award.
For those of you who follow us (whether more or less religiously), you know we have Categories on the left hand side of our home page. One of the Categories is “Section 998,” discussing the effect of Code of Civil Procedure section 998 in cost-shifting situations. In the next case, a neighbor in a Silverlake encroachment/boundary dispute put out a meaningful 998 offer by which she attempted to pay money to her opponents, yet preserve her claims for adjudication. Opponents did not accept the offer, much to their chagrin—they are going to have to address paying the 998 offeror a little over $37,000 in routine costs (most of which were expert witness fees).
The case we examine is Kempton v. Cooper, Case No. B210114 (2d Dist., Div. 1 Aug. 21, 2009) (unpublished), authored by Justice Chaney (who recently was elevated from the Los Angeles County Superior Court) on behalf of a 3-0 panel.
Defendant neighbor got caught in litigation commenced by plaintiffs, who not only sued her in a complaint but then filed a cross-complaint in response to defendant’s cross-complaint to their initial complaint. Defendant offered $15,000 total ($7,500 apiece) to her suing neighbors in a 998 offer to resolve their complaint and cross-complaint, but leave her cross-complaint for future adjudication. Her opponents did not accept, they lost after jury and court trials on legal and equitable issues, and her opponents were hit with a routine costs award of $37,045.02 in light of the failure to accept the 998 offer. Opponents appealed, but were not successful.
Opponents primarily argued that the 998 offer was invalid because it did not attempt to end the entire dispute by resolving defendant neighbor’s cross-complaint. That argument was foreclosed by Westamerica Bank v. MBG Industries, Inc., 158 Cal.App.4th 109, 130 (2007), which held that a 998 offer does not require a party to make an offer that resolves all aspects of a case. The offer did attempt to resolve all of her opponents’ actions, and that was sufficient.
They contended that the offer was void because it did not include an acceptance signature line, an acceptance statement, or an acceptance document of any kind. This challenge did not prevail. The 998 statutory provision only requires an explanation that the offeree must accept the offer by signing a statement, although the statement can either be in the offer itself or in a separate document. Defendant neighbor’s offer did have the acceptance explanatory language, which sufficed because “ … the 998 offer itself need not include a space or attach a document for the offeree to sign indicating acceptance of the offer.” (Slip Opn., at p. 11.) BLOG OBSERVATION—This result is consistent with the recent unpublished decision of Suarez v. County of Los Angeles (discussed in our June 21, 2009 post), which did find a 998 offer invalid when it contained no explanatory language about acceptance by the offeree.