Pre-Offer Costs Showed Plaintiffs Did Beat the 998 Offer.
In the next case, defendants/respondents received a "misfortune cookie." Shaffer v. Sassoon, Case No. B207219 (2d Dist., Div. 1 Dec. 30, 2009) (unpublished) is a case showing how Code of Civil Procedure section 998 offers operate in determining the prevailing party, cementing that pre-offer costs must be factored into the equation.
In this case, plaintiffs did win a nominal $1,413 verdict, but had incurred lots of costs—over $31,000—before defendants made a section 998 offer of $23,000 inclusive of costs and attorney's fees. The trial court, however, saw things differently, awarding defendants $70,000 in fees, $5,500 in expert fees, and $2,000 in deposition costs under section 998 on the theory that defendants prevailed given the nominal award to plaintiffs.
On appeal, the fee/costs award was reversed. Pre-offer costs must be considered in computing whether a judgment is more favorable than defendant's 998 offer. (Heritage Engineering Construction, Inc. v. City of Industry, 65 Cal.App.4th 1435, 1441 (1998).) Because plaintiffs did beat the 998 offer (almost $32,500 versus the $23,000 offer), the award of fees and costs had to be overturned.
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