Appellate Court Finds Accepted Offer Within 10 Days of Trial Date Was Effective in Issue of First Impression.
Tashvighi v. Rapid Plumbing, Inc., Case Nos. B229037/B235181 (2d Dist., Div. 4 July 24, 2012) (unpublished) involved a situation where a FEHA plaintiff, with FEHA usually allowing fees to a successful plaintiff, accepted a CCP § 998 offer on his individual claims for $30,000 (providing for a dismissal with prejudice and a release of individual claims) from the defense within 10 days of the scheduled trial date. The trial court found fee shifting was appropriate under the 998 offer, awarding $75,756.50 in fees (out of a requested $78,241.50) after an earlier fee award was denied without prejudice so that plaintiff could apportion out work on non-individual claims encompassed by the 998 offer.
Plumbers at work. 1937. Russell Lee, photographer. Library of Congress.
The defense mounted a multiple prong attack on the fee award, all without success.
After determining that the appeal on the fee ruling was not barred, the defense first argued that the fee ruling was premature and could not be issued until there was a later ruling on the enforceability of a settlement agreement. This argument was rejected because a dismissal of the case on the individual claims was actually entered before the fee rulings, which meant the fee award was proper given this sequence of events. (Roden v. Bergen Brunswig Corp., 107 Cal.App.4th 620, 630 & 630 n. 3 (2003).)
The defense next argued that the 998 offer was not a real offer because it envisioned a dismissal rather than a judgment. This was wrong as a matter of law. (American Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton, 96 Cal.App.4th 1017, 1055-1056 (2002) [dismissal with prejudice is functionally equivalent to a judgment for 998 purposes].)
Based mainly on post-acceptance communications, the defense argued there was an “implied fee waiver”–the defense wanted the $30,000 offer to be all inclusive, encompassing fee exposure as well. However, the 998 offer was silent as to fees and the pre-acceptance communications really showed no intent to limit fee exposure, invoking the bright-line rule in Engle v. Copenbarger & Copenbarger, LLP, 157 Cal.App.4th 165, 168 (2007) that silence in the 998 offer about fees means that a prevailing party can garner them as an accepting 998 offeree. It made no difference that the 998 offer required a release of individual claims as part of the overall deal, because this is routine and the parties have a good faith requirement to make sure the release is compliant with the offer’s intent.
That brought the appellate court to an acknowledged issue of first impression not addressed in any published decision. The defense argued that the 998 offer was untimely because it was served on a date that was ten days less than the date set for trial. Well, this novel argument lost as well. CCP § 998(b)(3) actually refers only to “actual commencement of trial” and omits the date set for trial, with actual commencement occurring when there is an opening statement or the swearing of the first witness/introduction of evidence if no opening statement is made. The appellate court determined that the 10-day limit only applied where there was no accepted 998 offer, because any other construction would lead to the absurd result of nullifying a judgment pursuant to the 998 offer to which both parties had agreed.
Finally, the defense argued that the 998 offer was ineffective because its counsel had no authority to make an offer that exposed the litigant to fee exposure. The problem here is that no CCP § 473 motion was brought to expose this claim for real lower court scrutiny and the real effective remedy was a malpractice action against the transgressing counsel, if the attorney was truly without authority.
Interesting 998 case to say the least.
