Second District, Division 7 Indicates It Will Not Follow Weinberg, But Does So On A Going Forward Basis.
The next opinion is interesting to show how appellate courts, when rejecting one of their prior decisions for failing to consider an important argument, will apply its new perspective only on a prospective basis in order to prevent unfairness to the litigants relying on the old precedent.
In Barnett v. First National Ins. Co. of America, Case No. B203310 (2d Dist., Div. 7 May 26, 2010) (certified for partial publication on the 998 issue), defendant carrier won a jury verdict in an insurance coverage dispute over damage to plaintiffs’ house. Prior to trial, defendants served plaintiffs with an unaccepted $100,000 Code of Civil Procedure section 998 offer, which was jointly addressed to both plaintiffs. The trial court denied a motion for award of expert witness fees under section 998 by finding the single offer made to two plaintiffs was invalid in nature.
The Court of Appeal affirmed, but in the process retracted from a prior decision out of Division 7.
In Weinberg v. Safeco Ins. Co. of America, 114 Cal.App.4th 1075, 1087 (2004), a similar 998 offer was found invalid because wife’s and husband’s damages for emotional distress were separate claims with variant degrees of injury. However, Division 7 indicated it would not follow Weinberg in the future because the prior decision had ignored a crucial legal distinction: a joint settlement offer made to husband and wife need not be allocated between them because, under community property principles, the spouses have equal interests in all proceeds. Thus, the apportionment problem that usually invalidates joint 998 offers is not present in these situations.
However, in order to be fair to the litigants in Barnett, Division 7 indicated that it would disregard Weinberg on a prospective basis only, nevertheless affirming what the trial court did because the state of the law was different before it issued its new decision. (Newman v. Emerson Radio Corp., 48 Cal.3d 973, 978-979 (1989).)
We should also note that the unpublished portion of the decision has a very good discussion of such topics as a weather exclusion in an insurance policy, ensuing losses, and efficient proximate causation—topics of interest to all of you insurance coverage practitioners or attorneys embroiled in coverage litigation.
Husband and wife, New Madrid County, Missouri, May 1938. Lee Russell, photographer. Library of Congress.