In a prior blog entry, CCP Section 998 Offers in a Personal Injury Case, we discussed the importance a CCP 998 settlement offer plays in resolving a claim stemming from a car, truck, motorcycle accident or other personal injury matter. Recently, in the case of Martinez vs. Brownco Construction Co. (2013), the California Supreme Court ruled that a party who beats their prior CCP 998 offers will be allowed to recover all of their costs incurred following their prior, previously rejected offer. This is a little confusing, so allow this example to help clarify. A car accident victim makes a CCP 998 offer to settle his case for $300,000 on March 1. The at-fault party does not accept the offer. On May 1 (after the first offer has expired) the personal injury plaintiff makes a second CCP 998 offer of $200,000 to settle the case. The party responsible for causing the car accident refuses the offer. Between March 1 and May 1 the accident victim incurs costs of $30,000. The case goes to trial and the jury renders a verdict in favor of the plaintiff for $300,000. From May 1 to the time verdict the plaintiff incurred $10,000 in additional costs. The question now is whether the plaintiff can recover the costs he incurred from the time of the first offer through the time of verdict ($40,000), or can he only recover costs incurred from the date of the second offer through the time of verdict ($10,000) because, as the argument goes, the second offer nullified the first offer, rendering it as though it never happened. Prior to the holding in Martinez, the plaintiff would only be allowed to recover the amount of costs incurred following the most recent 998 offer (so in this case $10,000). The prior law held that in the case of multiple CCP 998 offers, the most recent offer controls, as if no prior 998 offers had ever been made. Martinez effectively extinguished this rule and stated that the successful party (i.e., the party who beat their 998 offers at time of verdict) can recover all costs incurred from the time of the first reasonable offer, if they ultimately ended up beating that offer. The court ruled this way in order to incentivize settlements through the use of multiple offers. Knowing that the losing party will be responsible for all costs following any beaten offer will allow the accident victim to make early settlement offers or adjust their settlement offers in the hopes of settling the case before having to occupy the court’s time and taxpayers’ money with a lengthy trial. If you’re the victim of a car, truck, motorcycle accident, dog attack, or other personal injury matter, contact The Steven Dhillon Law Firm today.
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