Amy Jo McDaniel, et al. v. Loyd Richard Asuncion
Court of Appeal, Fifth District (March 27, 2013)
California has a statutory settlement procedure (Code of Civil Procedure § 998) by which a party may make a written offer to compromise and, if that offer is not accepted and the opposing party fails to recover a judgment more favorable than the offer, then (in the case of an offering defendant) recovery of costs shifts in favor of the offering party and (in the case of either party) the offering party may recover otherwise unrecoverable expert witness fees. Ordinarily, a single settlement offer made to multiple plaintiffs is considered to be invalid because, among other reasons, of the impossibility of determining whether any individual plaintiff’s judgment is “more favorable” than the joint settlement offer that was made to all plaintiffs.
In this case, the Court of Appeal determined that a single 998 offer made to two plaintiffs in a wrongful death action was valid because in a wrongful death action a single joint action is given to all heirs and the judgment must be for a single lump sum. Thus a single verdict can easily be compared to a joint offer to determine whether the offering party has achieved a more favorable judgment. The defendant in this case made a single $100,000 settlement offer to both plaintiffs. The plaintiffs recovered a $3.3 million verdict against a co-defendant but the jury returned a defense verdict in favor of the defendant who had made the statutory 998 offer. Because plaintiffs failed to obtain a more favorable judgment as to the offering defendant, that defendant was awarded $41,000 in expert witness fees by the trial court.
In reaching its conclusion affirming the trial court, the Court of Appeal noted that three other Courts of Appeal had considered the issue and had reached two different results. In Gilman v. Beverly California Corp. (1991) 231 Cal.App.3d 12, four plaintiffs had made a joint 998 offer to a single defendant in a medical malpractice wrongful death action. When the judgment at trial was more favorable than the offer, the trial court awarded plaintiffs their expert witness costs. The Sixth Appellate District reversed that award. The court concluded that the joint offer did not afford the defendant the opportunity to evaluate the distinct loss suffered by each plaintiff as a result of the death. The court further noted that without apportionment it was impossible to say that any one of the plaintiffs received a judgment more favorable than the offer.
In contrast to Gilman, in Stallman v. Bell (1991) 235 Cal.App.3d 740, Division Four of the Second Appellate District held that a joint 998 offer made by two plaintiffs in a wrongful death action was valid and upheld the trial court’s award of expert witness fees. The court reasoned that, unlike the cases in which the individual plaintiffs receive separate verdicts, in wrongful death actions there is but a single verdict to be compared to a single offer and from this comparison it can be clearly determined whether or not the plaintiffs received a more favorable judgment.
The third case to consider the matter, Johnson v. Pratt & Whitney Canada, Inc. (1994) 28 Cal.App.4th 613, noted that the results in Gilman and Stallman cannot be reconciled. Thus, Division Three of the Fourth Appellate District was required to make a choice and it decided that Stallman was the better reasoned decision. The Johnson court noted that because a wrongful death judgment must be for a single lump sum, even though the heirs share the damages in proportion to their loss, there would be little, if any justification for invalidating a joint offer. On that basis the Court found that the trial court properly awarded the plaintiffs their expert witness fees.
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