Offer Was Nothing More Than A Bare Promise To Pay In The Future, With A Dismissal Rather Than A Judgment Required, So It Was An Infirm Offer—It Could Not Be Valued Monetarily.
In Gavola v. CSJ Services, Inc., Case No. G062457 (4th Dist., Div. 3 Apr. 16, 2024) (unpublished), defendant transferee in a fraudulent conveyance suit made a CCP § 998 offer to plaintiffs stating, that in exchange for a dismissal, defendant would pay plaintiffs $75,000 under an installment schedule, with the first not due until after the scheduled trial date and the last not due until 210 days after acceptance. Then, the same defendant made another 998 offer that in exchange for a with prejudice dismissal and general release, defendant and another individual defendant would waive any fees and costs recoverable under section 998—although this offer was made too late. Plaintiff did not accept either offer, with the jury subsequently awarding Plaintiffs $45,000 in total damages against defendant transferee. Defendant moved for expert fees and postoffer costs totaling $24,100.79, a request granted under section 998 based on the first offer.
The 4/3 DCA, in an opinion authored by Justice Sanchez, reversed. The initial offer was invalid because it was a “no-risk offer” that made only a bare “promise to pay,” because the risks of nonpayment could not be valued given that the offeree had no monetary judgment to enforce because defendant required a dismissal instead. Independently, the offer was not made in good faith because the offeree did not know if the offeror was going to pay the installments. Put another way, the appellate panel believed the offer was illusory.