Multiple 998 Offers: First? Last? Any?

by Archer Norris PLC
Contact

Earlier this week, the state Supreme Court decided Martinez v. Brownco Construction Co. Inc., S200944.  The issue was when it comes to two or more valid CCP section 998 offers, each of which is exceeded by the amount of the judgment, which offer shifts costs/fees?  The state's high court affirmed the Second District's decision that the earliest offer can shift fees.  The Supreme Court rejected application of a bright line rule holding that the last valid offer is always the operative offer.

In Martinez, the plaintiff made a valid 998 offer for $250,000, which expired without being accepted. Much later, the plaintiff made another valid offer for $100,000, which was also not accepted. The plaintiff obtained a $250,000 judgment. Then the plaintiff sought expert witness fees from the date of the earlier 998 offer. (The swing between the two 998 offers was no small matter: $188,000.) Applying what is known as the "last offer rule," the trial court decided that the plaintiff's second offer "extinguished the first for all purposes" such that fees could only shift from the later offer.  The Court of Appeal reversed, holding that when a plaintiff makes two or more reasonable 998 offers all of which are valid and expire by operation of law, the plaintiff can shift expert witness fees based upon the earliest offer.

The Supreme Court granted review in light of the contradiction between the "last offer rule" and the earliest offer result in Martinez. In deciding Martinez, the Court rejected automatic application of the "last offer rule" to multiple valid offer cases such as Martinez. But the Court also appeared to embrace the "last offer rule" in a different kind of situation, those in which the earlier 998 offer hits and the later 998 offer misses. As the Court put it, "[F]or present purposes we may assume the propriety of applying the last offer rule where . . . an offeree obtains a judgment or award less favorable than a first section 998 offer but more favorable than the later offer." 

Now that Martinez has been decided, what is the current state of multiple 998 offer case law?

Multiple Valid Offers Hit:  As Martinez itself holds, the earliest of the offers can shift fees.

Earlier Valid Offer Hits, Last Valid Offer Misses:  As the Court stated in Martinez, the "last offer rule" still has validity here and carries an "assumption of propriety" given that the offeree obtained a more favorable judgment than that last 998 offer.  See also, Wilson v. Wal-Mart Stores, Inc. (1999) 72 Cal.App.4th 382, 389-390 and discussion of same, in Martinez.

Subsequent Offer Made While Time To Accept Prior Offer Still Running:  The making of a subsequent 998 offer while the time to accept a prior offer is still ticking invalidates the prior offer for cost/fee shifting purposes.  Thus, if it later turns out that the second offer was technically invalid, the offeror cannot fall back on the earlier offer because the offeree was deprived of the statutory time to accept it.  See Palmer v. Schindler Elevator Corp. (2003) 108 Cal.App.4th 154, 157-158.

Pending Offer Revoked, Earlier Valid Offer Hits:  If the offeror revokes a subsequent offer prior to acceptance or the running of the statutory period, an earlier valid offer that was not accepted can shift costs/fees.  See One Star, Inc. v. Staar Surgical Co. (2009) 179 Cal.App.4th 1082, 1093-1094.

Despite the categorizations above, in Martinez the Supreme Court steered clear of confirming a bright line rule that would always apply in multiple offer situations. As the Court put it, "we need not find the last offer rule or the first offer rule controlling in all circumstances."  (Emphasis original.)  The Court reiterated that trial courts retain substantial discretion to address offers that result "in any mischief or confusion, or [when] any gamesmanship appears . . ."  So it appears that there are no bright line rules in multiple offer cases.  But, it is also apparent that there are general rules, described above, that counsel should consult when navigating section 998's deep water.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Archer Norris PLC | Attorney Advertising

Written by:

Archer Norris PLC
Contact
more
less

Archer Norris PLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!