NEW APPELLATE DECISION A TRAP FOR THE UNWARY LITIGANT:

Under Code of Civil Procedure section 998, also called a statutory offer of compromise, a defendant or a plaintiff can offer to allow a judgment to be entered in favor of the plaintiff or the defendant for a specified amount.  The party receiving the offer then has 30 days to accept it, and if they don't accept it within that time frame then per the code section the offer is deemed to be rejected thereafter.

If the party  receiving the offer then goes to trial and fails to do better than what the offer was, then they cannot claim their costs of suit and the party making the offer is awarded their costs of suit.  Costs of suit are defined by statute and do not include attorney's fees, but can include costs for filing fees, service of process, jury fees, court reporter charges, costs for trial exhibits, and fees for expert witnesses.  The latter can often comprise the most expensive cost items for a case that goes as far as a trial.

In a personal injury case, if the defendant rejects a plaintiff's statutory offer and doesn't do better at trial, then the judgment for the plaintiff also bears pre-judgment interest back to the time the offer was rejected, at .10% per annum.

The code section also  specifies that a method of acceptance must be included within the body of the offer, such as a signature line showing acceptance for the party receiving the offer to sign their acceptance thereto.

The whole policy purpose behind C.C.P. sec. 998 is to encourage settlement, or to suffer adverse financial consequences if a litigant chooses to roll the dice at trial and then comes up short.

The failure of a plaintiff to do better at trial than what a defendant's pre-trial statutory offer was can be devastating, as the defendant's costs will be subtracted from whatever amount a plaintiff was awarded at trial.  If the plaintiff received nothing at trial or less than what the defendant's costs turn out to be, then the defendant is awarded a judgment against the plaintiff. A judgment can be enforced by the prevailing party by legal execution, including wage garnishment, a levy on a bank account, or a lien upon real property.

In a recently published California appellate case of first impression, it was held that a failure by the offering party to include an acceptance provision within the body of the offer was fatal in any attempt to be awarded costs thereafter, if the party receiving the offer rejected it and didn't do better at trial.

That case is Perez v. Torres (May 24, 2012) 2012 DJDAR 6810.

What does this mean for plaintiffs?  If the plaintiff is making a statutory offer, they must include an acceptance provision for the defense attorney to sign on, within the body of the offer.  If the defendant makes a statutory offer to the plaintiff and omits an acceptance provision, then the plaintiff, should they not want to accept the offer, should stay silent on the subject in case things don't turn out better after a trial.

Statutory offers of compromise are nearly always made by a defendant and usually by a plaintiff prior to trial, and they require a great deal of strategy and evaluation of the strength of the plaintiff's case that should be seriously discussed between the plaintiff and their attorney if they are to reap the benefits and avoid the adverse consequences of the procedure.

TOP TEN REASONS TO FIRE YOUR ATTORNEY:

1.  Can't provide you with legal advice unless he first consults with his parole officer.
2.  Law school degree on wall issued by correspondence course from University of Tierra Del Fuego.
3.  Advises you to cop a plea to involuntary manslaughter when you are consulting with him about a contract case.
4.  On his office stationery he has a nickname of "Bud", "Chip", or "Skip" printed in quotation marks between his first and last name.
5.  Drafts all legal documents with quill pen on parchment.
6.  Claims to specialize in space law but will still handle your case.
7.  Wears English barrister wig and black robe when at the office.
8.  Ankle bracelet sets off metal detector when he goes to the courthouse.
9.  Law office located in a van down by the river.
10.  Furiously pounds a gavel on his desk whenever you make an inquiry about your bill.

TOP TEN THINGS TO ASK BEFORE YOU RETAIN A PERSONAL INJURY ATTORNEY:

1.  How long have you been practicing law?
2.  How many personal injury cases have you handled in your career?
3.  Will you be willing to try my case if for any reason it cannot be settled?
4.  How many jury trials have you conducted?
5.  Is your contingency fee negotiable?
6.  Will I be responsible for case costs in addition to the contingency fee, and if so, are the costs contingent like  the fee?
7.  How would you propose to handle a case such as mine?
8.  How long will it take to resolve my case?
9.  Will I be forwarded copies of letters and other important documents on my case as it progresses?
10.  Will you personally handle my case and return my phone calls or e-mail inquiries?