Section 998 Test Focuses On Objective Reasonableness, Not Plaintiff’s Subjective Perception Of The Offer’s Fairness.
In Mkhitarian v. Jackson, Case No. B306198 (2d Dist., Div. 5 Sept. 20, 2021) (unpublished), plaintiff in a low level, soft issue vehicular injury case rejected both a pre-trial informal offer and subsequent CCP § 998 offer for $12,000 (together with a waiver of costs) coming after her case was filed. That was a bad judgment call, because the jury rendered a defense verdict on negligence causation grounds. The lower court denied plaintiff’s request to tax costs because the 998 offer was unreasonable, resulting in defendant obtaining costs (including $25,440 in expert witness fees).
The 2/5 DCA affirmed. Objective reasonableness of the offer, not plaintiff’s perception of its fairness, is the guiding test. The defense offer met this standard because the subsequent formal offer four months later did not show that any more information was needed to evaluate the offer. Here is the conclusion reached by the appellate panel: “Finally, we know of no rule that disqualifies a section 998 offer simply because it is the same as an offer made prior to litigation. A defendant’s willingness to make a pre-litigation offer should not foreclose automatically a reinstatement of the offer made four months later under the benefits of section 998. Instead that factor, like the others we have mentioned, becomes part of the mix to be considered by the trial court in exercising its discretion.” (Slip Op., p. 9.)