BILL ANALYSIS Ó
AB 1141
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ASSEMBLY THIRD READING
AB
1141 (Chau)
As Amended April 6, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+----------------------+---------------------|
|Judiciary |8-1 |Mark Stone, Alejo, |Wagner |
| | |Chau, Chiu, Cristina | |
| | |Garcia, Holden, | |
| | |Maienschein, | |
| | |O'Donnell | |
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SUMMARY: Makes two procedural corrections to the Code of Civil
Procedure. Specifically, this bill:
1)Reenacts and makes permanent the former summary adjudication
statute, Code of Civil Procedure (CCP) Section 437 (c), that was
inadvertently allowed to sunset on January 1, 2015.
2)Equalizes the treatment of expert witness costs that are awarded
to a defendant and a plaintiff after the other side's rejection
of a settlement offer made pursuant to CCP Section 998 (CCP
Section 998 or 998 settlements) so that a court can order a
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defendant, like a plaintiff, to pay the other side's costs of
the pre-offer, as well as the post-offer, services of an expert
witness.
EXISTING LAW:
1)Provides that a motion for summary adjudication shall be granted
only if it completely disposes of a cause of action, an
affirmative defense, a claim for damages, or an issue of duty.
2)Provides that the court has the discretion to require that the
following costs are paid by the unsuccessful party who refused
to compromise:
a) If the plaintiff rejects a 998 settlement offer by the
defendant and fails to obtain a more favorable judgment or
award at trial, the plaintiff cannot recover any postoffer
costs and shall be required to pay the defendant's costs from
the time of the offer. In addition, the court may require
the plaintiff to pay the defendant's costs for pre and
postoffer expert witness services.
b) If the defendant rejects the plaintiff's settlement offer
pursuant to CCP Section 998 and fails to receive a more
favorable judgment or award at trial, the defendant may, in
the court's discretion, be required to pay the plaintiff's
costs for postoffer expert witness services.
FISCAL EFFECT: None
COMMENTS: This bill, co-sponsored by the Consumer Attorneys of
California and the California Defense Counsel, reenacts and makes
permanent provisions that were formerly in statute relating to
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summary adjudication of partial issues, and which were
inadvertently allowed to sunset on January 1, 2015. Furthermore,
this bill creates equity between defendants and plaintiffs by
allowing both defendants and plaintiffs to obtain pre-offer expert
witness costs, as well as postoffer expert witness costs when the
opposing side rejects their 998 settlement offers.
Definition of summary adjudication. Summary adjudication in
California courts happens when a court, upon motion of a party,
makes a ruling on one or more major issues in a case in order to
resolve the entire cause of action or affirmative defense. If the
ruling requested will not be dispositive of the entire cause of
action or affirmative defense, the court is not authorized by law
to hear the motion. However, because of a change in the law in
2011 that amended CCP Section 473 (c), courts were allowed, from
January 1, 2012, until December 31, 2014, to summarily adjudicate
portions of major causes of action or affirmative defenses,
without resolving the entire cause of action or affirmative
defense in the case. This change in the law required that both
parties stipulate that the resolution of the issue by the court
would either: 1) reduce the time of trial; or 2) significantly
increase the ability of the parties to resolve the case by
settlement. According to an article in the California Bar
Journal, To Summarily Adjudicate or Not Adjudicate: The Recent
Amendments to Section 437c, the amended statute provided necessary
and long-awaited benefits to both defense and plaintiff attorneys.
( www.calbarjournal.com/march2012 ). Unfortunately, the amended
statute expired on January 1, 2015. This bill would reenact the
summary adjudication statute, allowing courts to grant motions to
resolve some issues in a cause of action, thereby improving
judicial economy, reducing the duration of trials, and encouraging
pre-trial settlements.
CCP Section 998 settlements. The primary purpose of CCP Section
998 is to encourage parties to settle their disputes prior to
trial. One incentive for the parties to accept pre-trial
settlement offers is to avoid being ordered to pay the expert
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witness costs of the other party, as a court may order, if he or
she is awarded less than the amount of the pre-trial settlement
offer amount at trial. As explained by one court, the policy of a
998 settlement is to encourage settlement and provide a severe
penalty for failing to settle when the result after trial is less
favorable than the offer that was made to settle the case before
trial. (Bank of San Pedro v. Superior Court (1993) 3 Cal.4th 797,
804.) The policy of 998 settlements is a good one: to encourage
settlements in order to save court time and reduce court
congestion because courts are already overburdened.
The need for equity in the court's discretion to award expert
witness costs after the rejection of a 998 offer to settle. This
bill addresses the inequity in treatment of expert witness costs
upon rejection of a settlement offer. It is unclear why the word
"postoffer" is in CCP Section 988 (d), describing the expert
witness fees which a defendant must pay if he or she rejects the
plaintiff's pre-trial settlement offer and is awarded a lower
amount after trial. It appears that in 2005, the Judiciary
Committee introduced a non-controversial omnibus bill, AB 1742
(Judiciary Committee), Chapter 706, Statutes of 2005, and an
amendment to the bill inserted the word "postoffer" into CCP
Section 998 (d). There was no intent language in AB 1742, so
there is no way to determine whether the amendment was made
intentionally, or as the result of an error. Considering the
commitment of the Judiciary Committee to maintain a level playing
field for all parties, to encourage pre-trial settlement, and to
ensure fairness in legislation, it is difficult to imagine why the
Judiciary Committee would provide an inequitable and disadvantaged
result for plaintiffs, as this amendment does.
Granting one party a more favorable result than another seems
especially unfair, considering that the distinction appears to be
the result of an inadvertent drafting error. The Judiciary
Committee has been unable to locate any materials indicating that
the addition of the word "postoffer" to CCP Section 988 (d) was
intentional and is not aware of any reason why the Legislature
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would want to treat the parties differently in terms of their
ability to recover expert witness costs if their good faith
pre-trial settlement offers are rejected. This bill provides the
remedy by equalizing the costs for both plaintiffs and defendants
in 998 settlement situations.
Analysis Prepared by:
Khadijah Hargett / JUD. / (916) 319-2334 FN:
0000182