Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1254

Introduced by Assembly Member Gorell

February 22, 2013

An act to amend Section 998 of the Code of Civil Procedure, relating to civil actions.

LEGISLATIVE COUNSEL’S DIGEST

AB 1254, as amended, Gorell. Civil actions: settlement offers.

begin delete

Existing law governs offers by a party to compromise a dispute that is to be resolved by trial or arbitration. Existing law provides that not less than 10 days prior to commencement of trial or arbitration of a dispute to be resolved by arbitration, any party may serve an offer in writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time. Existing law sets forth the requirements for the written offer and for the acceptance of the offer.

end delete begin insert

Under existing law, any party may serve an offer in writing, not less than 10 days prior to the commencement of trial or arbitration, upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time. Existing law provides that if the offer is not accepted prior to trial or arbitration or within 30 days after it is made, whichever comes first, and the offering party obtains a more favorable result at trial or arbitration, the party making the offer may recover his or her postoffer costs, including, at the discretion of the court or arbitrator, costs of the services of expert witnesses, as specified, actually incurred and reasonably necessary in preparation for trial or arbitration of the case.

end insert begin insert

This bill would provide that for a settlement offer that is not accepted to have the above-described effect, it must be served 15 days prior to the commencement of trial or arbitration and not be accepted prior to the trial or arbitration or within 25 days after the offer is made, whichever comes first.

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This bill would begin insert also end insert make begin insert a end insert technical, nonsubstantive begin delete changes end delete begin insert change end insert to these provisions of law.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 998 of the Code of Civil Procedure is
amended to read:

998.  

(a) The costs allowed under Sections 1031 and 1032 shall
be withheld or augmented as provided in this section.

(b) Within begin delete 10 end delete begin insert 15 end insert days prior to commencement of trial or
arbitration, provided in Section 1281 or 1295, of a dispute to be
resolved by arbitration, any party may serve an offer in writing
upon any other party to the action to allow judgment to be taken
or an award to be entered in accordance with the terms and
conditions stated at that time. The written offer shall include a
statement of the offer, containing the terms and conditions of the
judgment or award, and a provision that allows the accepting party
to indicate acceptance of the offer by signing a statement that the
offer is accepted. Any acceptance of the offer, whether made on
the document containing the offer or on a separate document of
acceptance, shall be in writing and shall be signed by counsel for
the accepting party or, if not represented by counsel, by the
accepting party.

(1) If the offer is accepted, the offer with proof of acceptance
shall be filed and the clerk or the judge shall enter judgment
accordingly. In the case of an arbitration, the offer with proof of
acceptance shall be filed with the arbitrator or arbitrators who shall
promptly render an award accordingly.

(2) If the offer is not accepted prior to trial or arbitration or
within begin delete 30 end delete begin insert 25 end insert days after it is made, whichever occurs first, it shall
be deemed withdrawn, and cannot be given in evidence upon the
trial or arbitration.

(3) For purposes of this subdivision, a trial or arbitration shall
be deemed to be actually commenced at the beginning of the
opening statement of the plaintiff or counsel, and if there is no
opening statement, then at the time of the administering of the oath
or affirmation to the first witness, or the introduction of any
evidence.

(c) (1) If an offer made by a defendant is not accepted and the
plaintiff fails to obtain a more favorable judgment or award, the
plaintiff shall not recover his or her postoffer costs and shall pay
the defendant’s costs from the time of the offer. In addition, in any
action or proceeding other than an eminent domain action, the
court or arbitrator, in its discretion, may require the plaintiff to
pay a reasonable sum to cover costs of the services of expert
witnesses, who are not regular employees of any party, actually
incurred and reasonably necessary in either, or both, preparation
for trial or arbitration, or during trial or arbitration, of the case by
the defendant.

(2) (A) In determining whether the plaintiff obtains a more
favorable judgment, the court or arbitrator shall exclude the
postoffer costs.

(B) It is the intent of the Legislature in enacting subparagraph
(A) to supersede the holding in Encinitas Plaza Real v. Knight,
209 Cal.App.3d 996, that attorney’s fees awarded to the prevailing
party were not costs for purposes of this section but were part of
the judgment.

(d) If an offer made by a plaintiff is not accepted and the
defendant fails to obtain a more favorable judgment or award in
any action or proceeding other than an eminent domain action, the
court or arbitrator, in its discretion, may require the defendant to
pay a reasonable sum to cover postoffer costs of the services of
expert witnesses, who are not regular employees of any party,
actually incurred and reasonably necessary in either, or both,
preparation for trial or arbitration, or during trial or arbitration, of
the case by the plaintiff, in addition to plaintiff’s costs.

(e) If an offer made by a defendant is not accepted and the
plaintiff fails to obtain a more favorable judgment or award, the
costs under this section, from the time of the offer, shall be
deducted from any damages awarded in favor of the plaintiff. If
the costs awarded under this section exceed the amount of the
damages awarded to the plaintiff the net amount shall be awarded
to the defendant and judgment or award shall be entered
accordingly.

(f) Police officers shall be deemed to be expert witnesses for
the purposes of this section. For purposes of this section, “plaintiff”
includes a cross-complainant and “defendant” includes a
cross-defendant. Any judgment or award entered pursuant to this
section shall be deemed to be a compromise settlement.

(g) This chapter does not apply to either of the following:

(1) An offer that is made by a plaintiff in an eminent domain
action.

(2) Any enforcement action brought in the name of the people
of the State of California by the Attorney General, a district
attorney, or a city attorney, acting as a public prosecutor.

(h) The costs for services of expert witnesses for trial under
subdivisions (c) and (d) shall not exceed those specified in Section
68092.5 of the Government Code.

(i) This section begin delete shall end delete begin insert does end insert not apply to labor arbitrations filed
pursuant to memoranda of understanding under the Ralph C. Dills
Act (Chapter 10.3 (commencing with Section 3512) of Division
4 of Title 1 of the Government Code).