However, The Reasonableness Of The 998 Offer—Not Ruled On By The Lower Court—Had To Be Revisited On Remand.
Matthews v. Ryan, Case Nos. B335736 et al. (2d Dist., Div. 1 Jan. 28, 2026) (partially published; 998 discussion published, but costs of proof sanctions discussion not published) has two good discussions, one on 998 offers which condition a settlement on an insurer’s consent and one on denial of RFA costs of proof sanctions under CCP § 2033.420. However, the ultimate lesson is that the defense in a personal injury case needs to seriously evaluate 998 offers, even early on, or face the possibility that a high jury verdict should have by hindsight led to an acceptance rather than a rejection of the pretrial offer.
This case involved an automobile collision in which plaintiffs won about $6.9 million against a defendant after a jury verdict, with the defense previously rejecting plaintiffs’ offer of $749,999.99 to settle the matter, conditioned on defendant insurer consenting to the settlement. The lower court found that the insurer condition in the 998 offer invalidated the offer (not reaching the issue of whether the offer was reasonable as to timing), and that costs of proof sanctions properly were not awarded to plaintiffs based on defense RFA denials. On appeal, the 2/1 DCA reversed/remanded the 998 ruling, but the panel affirmed the costs of proof sanctions denial. The 998 offer was not invalid because insurer consent to a settlement is a necessary requirement such that it was redundant of what was legally required, although there is a nice discussion of when conditional/multiple party 998 offers are found valid/invalid. However, because the lower court did not reach the reasonableness argument, the matter had to be remanded for it to determine if the defense had enough information at the time of the 998 offer to make a rationale evaluation of whether to accept it. On the RFA issue, the sanctions denial was no abuse of discretion because the defense showed that it had evidence and expert opinions leading defendant to deny RFAs in good faith, even though one expert changed his opinion on the seriousness of the injuries after RFAs were denied.