Second District, Division 4 Opts to Create “Bright Line” Rule in this Case Involving First Impression Issue.
So what happens when a defendant makes two separate pretrial settlement offers under Code of Civil Procedure section 998 but withdraws the second offer. Against which offer, if either, is the ultimate judgment measured for purpose of 998’s cost-shifting function?
The first offer, answered the Second District, Division 4, in One Star, Inc. v. Staar Surgical Co., Case No. B12098 (2d Dist., Div. 4 Nov. 30, 2009) (certified for publication).
Eschewing anything other than a “bright line” rule on this issue, Justice Suzukawa, writing for a 3-0 panel, decided that contractual revocation principles apply to the withdrawal of the second 998 offer. This meant that the first offer was revived for purposes of cost-shifting under section 998. The Court of Appeal believed that the opportunity for gamesmanship was shut down because the status of a withdrawn offer (one revoked before acceptance by the offeree) would be well known to both parties as soon as the subsequent 998 offer was withdrawn.
Although there was a third 998 offer, that related to an independent cross-complaint, such that it did not have any impact on the 998 offers germane to the complaint at issue.
BLOG UNDERVIEW—Co-contributor Mike notes that Isaac R. Zfaty was involved in this case. Mike litigated a case against Mr. Zfaty, one also involving a post-judgment 998 issue. Mike enjoyed his professional experiences with Mr. Zfaty.
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