Mon Chong Loong Trading Corp. v. Superior Court
California Court of Appeal, Second Appellate District (July 23, 2013)
California Code of Civil Procedure Section 998 offers to settle cases are a crucial tool in bringing matters to conclusion via settlement. One important factor to be considered is recovery of expert witness fees. This case considered the right to recover such fees when a plaintiff voluntarily dismisses the case following a statutory offer.
Plaintiff De Fang Cui filed suit against defendant Mon Chong Loong Trading Corp, alleging she suffered back injuries in a fall at defendant’s market. Defendant answered, and served a demand for experts, as well as notice of an IME. Subsequently, defendant made a statutory offer under Code of Civil Procedure Section 998 for $10,000 in exchange for a release of all claims. Plaintiff did not respond to the offer, did not appear for the IME, and did not participate in the exchange of expert witness lists and reports. Thereafter, defendant filed a motion in limine to preclude plaintiff from calling any expert witnesses or offering any expert testimony. On the last day on which an opposition to the motion in limine could be timely filed, plaintiff filed a request for voluntary dismissal of her complaint without prejudice.
Defendant filed a memorandum of costs seeking various costs, including expert witness fees. Plaintiff moved to strike the memorandum of costs in its entirety or, in the alternative, tax the defendant’s costs with respect to the expert witness fees. The Court granted the motion to tax the expert witness fees, but awarded the remaining costs. The Court held that defendant was not entitled to recover its expert fees pursuant to C.C.P. Section 998 because defendant did not obtain a “Judgment or Award” more favorable than its offer. The Court declined to consider plaintiff’s dismissal as a dismissal with prejudice and determined that plaintiff was not facing termination of her case pursuant to statute or motion at the time of dismissal.
The Court of Appeal reversed, holding that plaintiff’s voluntary dismissal of the complaint following the service of the CCP 998 offer triggered consideration of whether defendant could recover expert witness costs.
Initially, the Court noted that a plaintiff may voluntarily dismiss a complaint by written request to the clerk at any time prior to the commencement of trial. Under CCP Section 1032, a party in whose favor such a dismissal is entered is entitled to recover its costs, which generally do not include expert fees not ordered by the court. However, the Court of appeal noted that such expert fees may be recovered under CCP 998 “if an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award.” According to the Court of Appeal, by its plain language, Section 998 requires that the plaintiff who refused the reasonable settlement offer obtain a more favorable judgment or award in order to avoid possible liability for section 998 fees. Here, plaintiff did not obtain a more favorable judgment or award. Hence, defendant was entitled to recover his expert fees, if reasonable.
This case instructs that a method of conclusion for application of §998 is dismissal, whether with or without prejudice. The timing and wording of a 998 offer to compromise a matter are crucial and must be executed with great care and consideration of all factors.
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