California Court Awards Additional Costs After Party Rejects Settlement and Loses at Trial

In a recent California injury case, an appellate court ordered the losing parties to pay additional costs because they rejected a settlement offer before trial. In that case, two individuals died in a fire that occurred in a home they were renting. One was a three-year-old child, and the other was a 49-year-old mother. After the fire, the victims’ families sued the owners of the home.

GavelBefore trial, the plaintiffs made an offer to settle both claims for $1.5 million, but the defendants rejected the offer. The case went to trial, and the plaintiffs won, with the jury awarding the plaintiffs $2.2 million in the mother’s claim and $357,000 in the child’s claim. After the trial, the court ordered the defendants to pay additional costs because the defendants rejected the settlement offer.

Costs Under Section 998

Generally, the party that wins in a civil case can recover certain costs. In addition, in California, section 998 of the Code of Civil Procedure punishes a party that refuses a reasonable settlement offer by allowing the offering party to recover certain costs. Section 998 allows the prevailing party to recover additional costs and fees that are not generally available, such as expert witness fees.

The rule is meant to encourage parties to settle their lawsuits prior to trial. In order to qualify for these additional costs under Section 998, a settlement offer must be in writing, and it must be clear, meaning that it has to allow the receiving party to evaluate whether the offering party is likely to obtain a more favorable verdict at trial.

The Court’s Decision

On appeal, the defendants argued that the settlement offer was invalid because it was a joint offer, and they were not able to evaluate each claim independently. The court explained that joint settlement offers are not invalid under section 998 simply because they are jointly made. The court also considered whether it was clear that both parties had received a more favorable verdict at trial. It found it was clear that the mother’s family received a more favorable verdict because they made a joint offer to settle at $1.5 million and received $2.2 million.

The court recognized that it was not clear that the child’s family received a more favorable verdict at trial because they were awarded $357,000, and it was not stated how much would be given for each claim in the $1.5 million settlement offer. However, the court explained that it was clear that the mother’s family received a more favorable result, and the awards were based on a joint cost bill submitted by the plaintiffs. In addition, the court found that the defendants could properly evaluate the risk of trial, even though the settlement offer was not allocated between the two claims, since the defendants had evaluated the claims individually and added them together. Therefore, the court rejected the defendants’ appeal and awarded the additional costs to the plaintiffs.

Contact an Injury Attorney

At Sharifi Firm, our injury attorneys provide dedicated representation to Los Angeles residents who have been harmed due to the negligence of others. We handle many types of California wrongful death cases. We can fight tirelessly for the compensation that you need so that you and your family can focus on the physical and emotional healing process. We are determined to pursue the full awards that our clients deserve, depending on their specific circumstances. Contact us for a free, no-obligation consultation at 1-866-422-7222 or via our online form.

More Blog Posts:

How Do Courts Apportion Liability in California Personal Injury Cases Involving Multiple At-Fault Parties?, Southern California Injury Lawyer Blog, February 5, 2018

Hit-and-Run Accidents in Southern California, Southern California Injury Lawyer Blog, January 19, 2018

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