|
Settlement
A settlement between an insured and plaintiff is enforceable where the insured is fully covered despite the insured's failure to have consented to the settlement.
In
Fiege vs. Cooke (2004) 125 Cal.App.4th 1350, 23 Cal.Rptr.3d 496, plaintiff sued several fully insured defendants over a traffic accident. At a settlement conference counsel for the various defendants through authority given to them by the respective insurance carriers agreed to settle with plaintiff. The judge secured plaintiff's consent to the settlement. None of the insureds were present at the settlement conference nor were their signatures obtained on any settlement agreement. After the conference plaintiff sought to get out of the settlement. Under California Civil Code Section 664.6 a settlement may be enforced by way of motion if the parties stipulate in writing to the settlement of the case. Here, plaintiff argued that since the insureds did not participate in the settlement the agreement could not be enforced under C.C.P. §664.6. The Court of Appeal held that while C.C.P. §664.6 requires the "parties" to participate in the settlement, that requirement does not apply to insurance cases where the insureds are fully covered and thus counsel and/or the insurance carrier have a contractual right to settle without participation by the insured.
In order to be a valid offer under C.C.P. Section 998, a settlement offer need only comport with the minimal requirements of the statute.
In
Berg vs. Darden (2004) 120 Cal.App.4th 721, 15 Cal.Rptr.3d 829, plaintiff sent a three page letter to the defendant, the last paragraph of which indicated that the plaintiff was making a statutory C.C.P. §998 offer to settle in a certain amount. Defendant’s counsel in reply to the letter stated he did not believe it was a valid offer under C.C.P. §998. Thereafter, plaintiff obtained a verdict in excess of the offer and then sought to recover prejudgment interest and expert costs pursuant to the statute. Defendant argued the offer was not a valid one as it did not identify the method by which the litigation would be resolved (dismissal or judgment); was made informally as part of a letter dealing with other issues in the case; and was not formally served. The Court of Appeal held that the offer met with the statutory requirements of C.C.P. §998 though it did not comply exactly with the terms of the statute and was not supported with a formal proof of service.
The offer was sufficient since it was in writing, invoked C.C.P. §998, was for a sum certain to dispose of the entire case and was dated and mailed to defendant’s attorney of record.
10-day period of notice required by C.C.P. §998 offer of compromise extended 5-days when offer is served by mail.
In
Lecuyer vs. Sunset Trails Apartments (2004) 120 Cal.App.4th 920, 16 Cal.Rptr.3d 169, defendant mailed a C.C.P. §998 offer to compromise to plaintiff 13 days before the trial date. C.C.P. §998 requires that an offer be made no later than 10 days before trial. After defendant obtained a verdict which was more favorable than its offer, defendant sought to shift costs to plaintiff under C.C.P. §998. The Court of Appeal held that costs could not be shifted as the offer of settlement was not timely served. The 10-day notice requirement set forth in C.C.P. §998(b) is extended five days under C.C.P. §1013(a) when the Section 998 offer is served by mail.
An offer to pay a sum equal to the amount of reasonable attorneys fees and taxable costs does not render a C.C.P. §998 offer of settlement unenforceable.
In
Elite Show Services, Inc. vs. Staffpro, Inc. (2004) 119 Cal.App.4th 263, 14 Cal.Rptr.3d 184, the court of appeal confirmed the awarding of expert fees and costs to a non-prevailing party under the provisions of California Code of Civil Procedure §998. C.C.P. §998 provides that if a party obtains a judgment less favorable than a pretrial settlement offer made by the other party, then that party must pay its opponent’s postoffer costs including expert witness fees if awarded in the court’s discretion. Here, defendant Staffpro made a settlement offer in which it would agree to the precise injunctive relief sought by the plaintiffs and also agreed to pay a sum equal to the amount of the reasonable attorney’s fees and taxable costs that Elite had incurred in prosecuting the action up until the date of the offer. The case proceeded to a court trial following which the judge determined that neither party had prevailed and ordered that each party would bear its own costs and expenses.
Thereafter Staffpro filed a motion for an award of costs and expert witness fees under C.C.P. §998. Elite opposed the motion arguing that the offer could not be enforced as it was too uncertain and not unconditional and that it did not specify a specific dollar amount. The court of appeal found the offer was sufficiently certain under C.C.P. §998 as there are specific statutory and rule provisions which set forth a procedure for determining the amount of attorneys fees. The fact that the amount of costs and fees must be determined after acceptance of the offer does not render the offer fatally uncertain.
Plaintiff's C.C.P. Section 998 demand is valid even where it is jointly made on behalf of two plaintiffs and subject to a condition subsequent.
In the case of DeoCampo v. Ahn (2002) 101 Cal.App.4th 758, 125 Cal.Rptr.2d 79, plaintiffs served a C.C.P. Section 998 demand in a medical malpractice case for the combined stated limits of the defendants insurance policies or the sum of $1,000,000.00, whichever was greater, and, if it were discovered that defendant had more insurance than previously disclosed, plaintiffs reserved at their option the right to vacate the judgment entered pursuant to the offer. The Court rejected the defendants' objection that the offer was invalid since it was not limited to one party and reserved the right to later void the settlement. The court also determined that the entirety of a settlement reached with the co-defendant could be used to offset plaintiff's past damages and further approved the trial court's decision to order equal periodic payments for future damages.
C.C.P. Section 664.6 may not be used to enforce a written settlement agreement unless it is signed by all parties.
In Sully Miller Contracting Co., v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 126 Cal.Rptr.2d 400, the defendant attempted to enforce a settlement agreement under the summary provisions of C.C.P. Section 664.6 based upon a settlement agreement which had been prepared by his attorneys and sent to the plaintiffs for their signature. The settlement agreement did not provide for a signature on behalf of the defendant and in fact was unsigned by the defendant at the time the plaintiffs signed it. Adding the defendant's signature later once it became an issue did not satisfy the requirements of C.C.P. Section 664.6 that the written settlement agreement be signed by all parties.
A C.C.P. Section 998 Offer to Compromise is not extinguished by a judgment that is vacated by subsequent order for new trial.
In Saakyan v. Modern Auto Inc.(2002) 103 Cal.App.4th 383, 126 Cal.Rptr.2d 674, the first trial resulted in a defense verdict which was then set aside by the grant of a motion for new trial. The second trial resulted in a verdict for the plaintiffs. The verdict was more favorable to the plaintiffs than the offer of settlement they had served on the defendants pursuant to C.C.P. Section 998 before the first trial. The trial court denied plaintiffs' motion for expert witness fees and prejudgment interest following the second trial on the ground that the first verdict extinguished any rights the plaintiffs might have acquired by virtue of their C.C.P. Section 998 offer. The Court of Appeal reversed the trial court's order and allowed plaintiffs to recover the additional fees and costs available under C.C.P. Section 998.
The summary enforcement procedure provided by C.C.P. Section 664.6 is not available when the settlement agreement is signed by a party's agent.
In Gauss v. GAF Corporation (2002) 103 Cal.App.4th 1110, 127 Cal.Rptr.2d. 370, a party sought to utilize C.C.P. Section 664.6 to enforce a settlement agreement where the settlement agreement had been signed by a party's agent who had sole and exclusive authority to settle claims on behalf of that party. The Court of Appeal determined that the requirement that a written settlement agreement be signed by all parties was not satisfied by having an agent of a party sign the agreement. This holding does not indicate the settlement agreement is void or not enforceable, but only that it is not enforceable under the summary procedure set forth by Code of Civil Procedure Section 664.6.
Law firm retained by insured to defend insured has no obligation to consult with insured in settling the action.
In the case of New Plumbing Contractors, Inc. v. Edwards, Sooy & Byron (2002) 99 Cal.App.4th 799, 121 Cal.Rptr. 472, Defendant contractor sued its attorneys for malpractice and breach of fiduciary duty. Following settlement the defendant sued its attorneys which had been hired by its liability carrier to defend it in a lawsuit. The defendant alleged that the law firm did not consult with it in defending and settling the action and subsequently its insurance costs increased. As a matter of law the Court of Appeal held defense counsel's recommendations of settlement were not a cause of harm since the insurer had the right under the consent clause of the policy to settle the action without consulting with its insured.
Judgment entered pursuant to C.C.P. §998 Offer of Settlement can be set aside based upon mistake or excusable neglect of counsel.
In the case of Zamora v. Claiborne Contracting Inc. (2002) 28 Cal.4th 249, 121 Cal.Rptr.2d 187, both parties sued each other in a complaint and a cross-complaint for breach of contract and other related claims. Counsel for Zamora served a C.C.P. §998 offer to compromise with the intent of offering to settle the claims against Claiborne for $150,000.00. Instead of stating in its C.C.P. §998 offer to settle that Zamora would offer to have judgment taken against Claiborne for $150,000.00, counsel for Zamora mistakenly stated, "Zamora hereby offers to have judgment taken against himself and for defendant Claiborne..."
Counsel for Claiborne immediately filed a notice of acceptance of the offer following which judgment based upon the offer and acceptance was entered. Zamora's counsel filed a motion under C.C.P. §473 seeking to set aside the judgment based upon mistake and excusable neglect. The offer had been prepared by a legal assistant who had received instruction from counsel over the telephone. In granting relief the Supreme Court noted that this type of clerical mistake could have been made by anybody and while counsel's failure to review the document was imprudent, it could not be stated that his imprudence rendered the mistake inexcusable under the circumstances.
The parties to a settlement agreement may not utilize the summary provisions of C.C.P. § 664.6 to enforce a settlement agreement unless the parties at the time of the settlement specifically request the court to retain jurisdiction.
In Wackeen v. Malis (2002) 97 Cal.App.4th 429, 118 Cal.Rptr.2d 502, the parties to a settlement agreement returned to court in an attempt to enforce the settlement agreement by way of motion before the judge to whom the case originally had been assigned. Prior to the enactment of C.C.P. §664.6 a party who wished to enforce a settlement agreement would have to bring a separate action or, if the underlying action was still pending, seek leave of court to file an amended pleading. C.C.P. §664.6 provides that where the parties to pending litigation agree either in writing signed by all the parties or orally before the court to settlement of the case, the Court may thereafter enter judgment pursuant to the terms of the settlement and "if requested by the parties" the court may retain jurisdiction to enforce the settlement agreement.
The parties here sought to enforce their settlement agreement by way of motion though they had not expressly requested that the court retain jurisdiction over them to enforce it. The parties asked that the court examine the facts of the case in order to determine whether the parties constructively "requested" that the court retain jurisdiction. The Appellate Court held that in order for the trial court to retain jurisdiction the parties must make their request in the settlement agreement, in a separate writing, or orally before the court.
Acceptance of a C.C.P. §998 offer of settlement may be communicated in any manner not inconsistent with the settlement offer.
In the case of Gray v. Stewart (2002) 97 Cal.App.4th 1394, 119 Cal.Rptr.2d. 217, plaintiff attempted to back-out of a settlement after the defendant had communicated acceptance of the plaintiff's C.C.P. §998 offer to settle. C.C.P. §998 provides a mechanism whereby the parties to litigation may submit formally offers of settlement, which, if rejected, may result in the shifting of costs if the party rejecting the settlement has done so unreasonably.
Here, plaintiff sent to defendant's attorneys an offer of settlement in the amount of $5000.00. Several days after a settlement conference the defendant's attorney told the plaintiff's attorney that the defendant accepted the Section 998 offer of settlement. Plaintiff acknowledged that the acceptance was communicated verbally in unambiguous terms and that plaintiff's attorneys heard and understood the acceptance.
Plaintiff thereafter attempted to back-out of the settlement contending that C.C.P. §998 required a written acceptance of the offer and therefore the verbal acceptance was not valid. The Court found that C.C.P. §998 and case law require only that the offer be in writing. Plaintiff's attorney had attempted to void the acceptance by filing a withdrawal of the offer before the defendant's attorney could file proof of acceptance. The Court found that the fact that the proof of acceptance was filed after the attempted revocation did not affect the validity of the acceptance.
County lien on personal injury case expunged.
In personal injury cases, California Government Code Section 23004.1 provides that, where a county is obligated to treat the injured party, then the County shall have a lien, or right to recover, for the reasonable value of the care and treatment from any third persons legally responsible for causing the injury. This Section gives the County the right to either assert a lien in the injured party's personal injury or wrongful death case, or, if no case is pursued by the injured party, the right to pursue its own lawsuit against the responsible party.
In the case of Mares v. Baughman (2001) 92 Cal.App.4th 672, 112 Cal.Rptr.2d 264, the Court of Appeal noted that counties routinely imposed liens in these cases, whether the cases terminated by way of settlement or by way of judgment. In this wrongful death case the plaintiffs and defendants joined in a motion asking the court to expunge the county's lien contending that the statute did not allow the imposition of a lien on a settlement, as opposed to a judgment. The motion was granted and the Court of Appeal affirmed finding that the lien could not be asserted against the proceeds from the settlement.
It should be noted that Government Code Section 23004.1 gives the county the right to pursue separately its own lawsuit against the defendants in order to recover the reasonable value of the care and treatment provided to the injured party. However, if the injured party or the heirs file their own lawsuit the county's right to bring a lawsuit is converted to a first lien against any judgment.
While the plaintiffs were successful in this case in preventing the county from recovery any portion of their settlement, the defendants nonetheless remained exposed as the county following the settlement would have a right to file its own lawsuit against the settling defendants. The defendants here apparently believed that the county either could not prove their case or anticipated the county would be willing to negotiate the amount of its lien when faced with having to pursue its own lawsuit.
Attorney fees after plaintiffs recover C.C.P.§998 settlement.
In the case of Ritzenthaler v. Fireside Thrift Company (2001) 93 Cal.App.4th 986, 113 Cal.Rptr.2d 579, a failure to properly word a C.C.P. Section 998 Offer to Compromise ultimately resulted in the Defendants having to pay not only the amount of the settlement, but also attorneys fees pursuant to a motion following the entry of judgment under the settlement. The Plaintiffs were used car purchasers who had sued the Defendant finance company for bad faith, seeking general and special damages. They also sought attorneys fees based upon a clause in the security agreement and promissory note. Eventually, the Defendants served a C.C.P. §998 Offer to Compromise, which was accepted by the Plaintiffs.
The Offer to Compromise encompassed "all damages and injunctive claims" asserted by the Plaintiffs but did not mention the claim for attorneys fees. The Court of Appeal found that the failure to specifically mention attorneys' fees was sufficient to allow the Plaintiffs to proceed with their motion for fees based upon the contract.
|
