Second District, Division 6 Reinforces the Lesson in Workers’ Comp Lien Dispute.
We have, on many occasions, discussed Code of Civil Procedure section 998, a fee-shifting statute based upon an offer of compromise. (See our category “Section 998” for more information on this area of the law.) Two of the things that must be paid attention to in most section 998 offers are: (1) making sure offers are apportioned among parties with divergent interests; and (2) making sure offers are certain and unambiguous. These principles came into play in the next case, rendering the 998 offers by the prevailing party unenforceable in nature.
In American Safety Casualty Ins. Co. v. Mothershead, Case No. B206494 (2d Dist., Div. 6 May 12, 2009) (unpublished), real property owners had made a section 998 offer upon a workers’ compensation carrier and injured worker to settle the matter. Neither offer was accepted, and real property owners were absolved after a jury trial. Owners then requested $100,526.27 in costs (including $47,402.62 in expert witness fees) based on their perception of having beat the other parties under section 998. The lower court found the section 998 offers were invalid. Real property owners appealed.
They lost their bid on appeal.
The Court of Appeal agreed with the trial court’s assessment of the 998 offers in two respects. First, the 998 offer to the injured worker was conditional upon satisfaction of the workers’ comp lien by another party—in effect, it was akin to a joint offer that could not allow each individual offeree a chance to accept or reject it. (Menees v Andrews, 122 Cal.App.4th 1540, 1544 (2004).) Second, the offer was not drafted with requisite specificity because it asked worker to dismiss the workers comp carrier’s complaint-in-intervention, something he could not do. Workers’ comp carrier was requested to satisfy any liens, without specifying the amount or type of liens to be released. “Neither was sufficiently certain to be capable of evaluation. The offers did not trigger the cost-shifting provisions of section 998.” (Slip Opn., at p. 6.) Owners lost their bid for fee shifting under section 998 based on a failure to apportion and to make the offers with required specificity.