Although Other Settlement Procedures Could Be Utilized, Section 998 Did Not Allow Entry Of Judgment Based On A Less Than Clear Settlement.
Siri v. Sutter Home Winery, Inc., Case No. A161923 (1st Dist., Div. 4 Aug. 25, 2022) (published) should remind all practitioners that CCP § 998 cannot be used as a surrogate method to adjudicate whether a settlement has been reached.
What happened in this matter is that the parties somewhat seemed to agree to settle, but maybe not. It is ambiguous, with that being what led to a reversal of what occurred at the lower court level. Plaintiff accepted a conditional 998 offer, with many future conditions attached—mainly whether prejudgment interest should be awarded. But, the defense seemed to accede to that request, seeming to suggest that it was amenable to a future court determination of the issue, although not well documented through the actual acceptance. The lower court determined that a binding settlement was reached under section 998, entering judgment accordingly.
Not so fast, and no, according to the appellate court. Section 998 requires an absolute, unqualified acceptance. That did not occur, so the lower court result had to be reversed. The appellate court did admit that there might be other ways to be utilized to find that a binding settlement was reached, but section 998 procedures were not one of them.
BLOG OBSERVATION—This was probably the right result. However, parties who do engage in negotiations under a section 998 pretrial offer and reach a “likely” agreement should simply agree to a settlement agreement or allow the 998 offeror to issue a new 998 offer which is accepted, with language such as “we agree to the number but prejudgment issues will be determined by the court in a post-acceptance noticed motion.” We bloggers cannot predict that this will pass muster, but it something along the lines suggested by the appellate result.
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