Second District, Division 8 Is Not Going To Be First Court To So Hold to the Contrary.
In Aguilar v. Gostischef, Case No. B238853 (2d Dist., Div. 8 Oct. 13, 2013) (published), a plaintiff losing a leg in an automobile accident made pre-trial offers to attempt to accept defendant’s insured’s $100,000 policy limits coverage even though plaintiff’s injuries were “monetized” at well over $500,000. Insured stonewalled on three occasions, providing no response at all to plaintiff’s plea for a policy term settlement. Finally, plaintiff sued insured, with insured (obviously, via insurer-retained counsel) transmitting a $100,000 998 offer and plaintiff countering with his own $700,000 998 offer after earlier notifying the insurer that it could well be liable for an excess judgment in ignoring attempts to the settle the matter within policy limits. The case proceeded to trial, with plaintiff winning court-reduced compensatory damages of $2,339,657 (which was thrown out on a JNOV, but later reinstated in an earlier appeal win by plaintiff). Plaintiff then sought $1,639,451.14 in costs, including prejudgment interest from the date of the “liquidated” 998 offer, with insurer not even moving to tax costs.
The lower court decided plaintiff’s $700,000 offer was made in good faith, reducing the requested costs by only $5,903.85 meaning that the ultimate costs award was $1,633,547.29. Farmers challenged the costs award on appeal.
The 2/8 DCA, in a 3-0 opinion authored by Justice Flier, found the 998 offer was made in good faith. Given that an insurer who fails to pay policy limits in a serious case is “playing with fire” and may be liable for an excess judgment, in tandem with plaintiff’s counsel’s warning that an excess judgment was a very good possibility, insurer had plenty of information to assess the total picture and its delay in responding certainly raised the specter that an excess judgment could result. Affirmed.
Comments