However, Article Actually Explores Nuances Applicable In Non-Employment Matters.
In the June 2015 edition of The Advocate Magazine, attorney Iris Weinmann—a partner in Greenberg & Weinmann (located in Santa Monica)—has authored a very instructive article entitled “Making and responding to CCP 998 offers in employment matters” and subtitled “Dealing with multiple parties, and determining whether the judgment at trial was more favorable than the 998 offer.” We now summarize some highlights from her article below:
1. The offeror must provide a method for providing written acceptance. If not, it will be held invalid. (Puerta v. Torres, 195 Cal.App.4th 1267, 1273 (2011).) Ms. Weinmann provides a practice tip—“best practice is to include a signature line for acceptance directly in the offer,” referencing Judicial Council Form CIV-090 (keeping in mind this is for a single plaintiff/single defendant case).
2. No minimum time period after the lawsuit is filed “stays” the giving of a 998 offer. Unlike the “hold” on discovery for a filing party, there is no “hold” on giving a 998 offer early on in a case. (Barba v. Perez, 166 Cal.App.4th 444, 452 (2008).) However, for it to be deemed reasonable and good faith, prudence probably dictates in most cases that the 998 offer is made after all sides have an opportunity to gain information for purposes of intelligently evaluating the case.
3. A 998 offer must be reasonable and made in good faith. She surveys the case law on this topic, which basically teaches that an offer is best made when everyone has exchanged information for purposes of meaningfully evaluating the pending matter. (See especially Elrod v. Oregon Cummins Diesel, Inc., 195 Cal.App.3d 692, 697-699 (1987).)
4. Inclusion of non-monetary terms can invalidate a 998 offer. Inclusion of confidentiality provisions and release of claims not covered by the pleadings will invalidate a 998 offer. (Barella v. Exchange Bank, 84 Cal.App.4th 793, 795 (2000) [confidentiality provision]; Valentino v. Elliot Sav-On Gas, Inc., 201 Cal.App.3d 692, 694 (1988) [release of claims not contained in a complaint resulted in invalidity of 998 offer].)
5. 998 offeror bears the burden of demonstrating the offer is valid. See Taing v. Johnson Scaffolding Co., 9 Cal.App.4th 579, 585 (1992).
6. Acceptance of 998 offer is extended 5 days if served by mail. Section 998 is clear on the acceptance deadlines; however, if served by mail, the period for acceptance is extended by 5 days for in-state offers. (Poster v. Southern Cal. Rapid Transit Dist., 52 Cal.3d 266, 275 (1990).)
7. Revocation and counteroffers by offerors. Offerors can revoke 998 offers; however, if there is clarification or negotiation over a 998 offer such that a counteroffer is made by the offeror, the offeree is free to accept as long as the acceptance period has not lapsed or there has been no revocation. (Poster, supra, 52 Cal.3d at pp. 270-272.)
8. 998 offer excluding “costs” also includes attorney’s fees within the exclusion. See Martinez v. Los Angeles County Metropolitan Transportation Authority, 195 Cal.App.4th 1038, 1041 (2011).
9. Unallocated offer to multiple plaintiffs is generally invalid where all plaintiffs must accept or reject the offer. See Meissner v. Paulson, 212 Cal.App.3d 785, 791 (1989).
10. Best practice is for multiple plaintiffs to allocate offers per plaintiff to multiple defendants. See Hurlbut v. Sonora Community Hospital, 207 Cal.App.3d 388, 410 (1989).
11. Single plaintiff offer to jointly and severally liable defendants does not have to be allocated, likely operating in reverse – jointly and severally liable defendants may jointly submit an offer to a single plaintiff without apportionment. See Bihun v. AT&T Information Systems, 13 Cal.App.4th 976, 1000-1001 (1993); Santantonio v. Westinghouse Broadcasting Co., Inc., 25 Cal.App.4th 102, 114 (1994).
12. When is an award more favorable than the 998 offer? For the defense serving a 998 offer which has been rejected, the judgment plus pre-offer costs (before the offer was made), which includes recoverable attorney’s fees, is the proper benchmark. (Heritage Engineering Construction, Inc. v. City of Industry, 65 Cal.App.4th 1435, 1441 (1998); Wilson v. Safety Stores, Inc., 52 Cal.App.4th 267, 269 (1997).) For the plaintiff serving a 998 offer which has been rejected, plaintiff’s pre-offer and post-offer costs, inclusive of authorized attorney’s fees, are included in calculating whether the judgment exceeds the 998 offer, regardless of whether the 998 offer provides that each side bears its own costs. (Stallman v. Bell, 235 Cal.App.3d 740, 748-749 (1991).)
13. What are the rule governing multiple 998 offers made by the same party? Martinez v. Brownco Construction Co., 56 Cal.4th 1014, 1017 (2013) found that the date of the first 998 offer governs where the where plaintiff obtains a more favorable judgment with respect to the defense’s offers. However, where if a 998 offeror obtains a judgment more favorable than the first offer but not more favorable than the second offer, it is likely under present law that the second offer revokes the first one. (Wilson v. Wal-Mart Stores, Inc., 72 Cal.App.4th 382, 389-390 (1999).)
14. Offeror withdrawing a second 998 offer before acceptance faces risk based on the prior last rejected offer. See One Star, Inc. v. STAAR Surgical Co., 179 Cal.App.4th 1082, 1094-1095 (2009).