Developer Found Negligent, But Not Hit With Any Damages, Did Not Recoup Claimed Costs Of $97,875.42.
A residential tract developer found negligent in a construction defect case by a jury must have felt emboldened because the same jury awarded no damages. Developer then sought to recoup $97,875.42 ($77,660 being expert witness fees) in costs under CCP § 998 after plaintiff homeowners rejected a pre-trial $5,000 998 offer. The lower court found the offer was not made in good faith.
The Second District, Division 6 affirmed the costs denial in Winser v. Pardee Homes, Case No. B243615 (2d Dist., Div. 6 Aug. 7, 2014) (unpublished).
No abuse of discretion was shown. Two days prior to the $5,000 offer, developer offered to settle with homeowners for $25,000, an offer which was rejected. No formal discovery had been conducted at the time of the 998 offer. The lower court was within its leeway to conclude that the $5,000 offer was made to preserve the right to expert witness fees rather than settle the case. Developer could not have believed the offer would have been accepted given rejection of an informal proposal five times larger. A no-risk offer made to only preserve expert witness fee recoupment can lead to the conclusion it was not made in good faith, which is what happened here. (Jones v. Dumrichob, 63 Cal.App.4th 158, 1262-1263 (1998).)