Moral Of The Story Is To Craft Our 998 Offers Carefully As Far As Wording.
We will tell you that Code of Civil Procedure section 998 offers, as far as substance, are usually subject to contract interpretation principles. Although it comes from Rhode Island, we will share with you some insights from a decision which interpreted an offer of judgment provision which still has some instructiveness for drafting 998 offers in California.
In Taylor v. Scott Motors, Inc., C.A. No. PC-2015-4284 (R.I. Super. Ct. Feb. 4, 2021), a simple consumer case turned into five years of litigation over a software update for a VW Jetta SportWagen TDI diesel station wagon between the car owner and dealership. The dealership made an offer of judgment under Rhode Island Superior Court Rule Civil Procedure 68(a) [modeled under the federal rule] for a set sum, plus “the amount of costs (including reasonable attorney’s fees) incurred in connection with this action through the [offer] date hereof in an amount to be determined by the Court.” Plaintiff accepted the offer, and then sought $256,000 in lodestar fees augmented positively by 20% for a total of $307,000. The defense objected to the request based on the argument Plaintiff presented no evidence that she “incurred” any fees because she had no fee agreement with her counsel and had no legal obligation to pay them.
The defense arguments did not resonate. The Rhode Island court ultimately determined that “incurred” simply meant that the counsel did the work; if defendant had wanted to make things clearer, it would best to replace the term “incurred” with “billed to and paid by Plaintiff,” clearer language which was missing and did not divest plaintiff of fee entitlement under the offer.
Moral of the story: be precise in drafting 998 offers; use “billed and paid by Plaintiff” rather than “incurred” if you want to narrow fee entitlement under pretrial offers.