Requirement That Plaintiff Sign A General Release Did Not Invalidate The § 998 Offer As The General Release Clearly And Unambiguously Applied Only To The Claims In The Underlying Action.
Plaintiff received a $17,259.19 jury verdict in his Song-Beverly Consumer Warranty Act violations (California’s lemon law; Civ. Code § 1790 et seq.) action against Toyota. However, when both parties moved post-trial to recover attorney fees and costs, the trial court awarded Toyota with its postoffer costs – finding plaintiff had failed to recover more at trial than Toyota had offered in its pretrial Code Civ. Proc. § 998 offer to compromise, which would have provided plaintiff $20,857.27 in restitution, plus $10,000 in attorney fees, and payment of the balance of plaintiff’s lease in exchange for return of the car with clear title, dismissal of the action, and execution of a general release.
Plaintiff appealed, arguing Toyota’s § 998 offer was invalid because it included a vague general release that would have included a Civ. Code § 1542 waiver of known and unknown claims, and was not attached to the offer itself, but the 2/8 DCA affirmed Khoshnevis v. Toyota Motor Sales, U.S.A., Case No. B301461 (2d Dist., Div. 8 April 30, 2021) (unpublished).
Although a § 998 offer that includes a nonmonetary component can sometimes create a situation where the trial court is unable to attach an overall value to the offer – rendering the offer invalid – that was not the case here. The panel found Toyota’s offer capable of valuation as it clearly and unambiguously applied only to the underlying action, and the general release was limited only to the claims already being litigated. Additionally, the panel found no authority mandating that a release itself be attached to the offer, and held it unnecessary where the offer otherwise appropriately limits the scope of the release.