BILL ANALYSIS Ó
AB 1141
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CONCURRENCE IN SENATE AMENDMENTS
AB
1141 (Chau)
As Amended July 14, 2015
Majority vote
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|ASSEMBLY: | | (April 23, |SENATE: |40-0 | (August 24, |
| |48-29 |2015) | | |2015) |
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Original Committee Reference: JUD.
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,
including the recent amendments to CCP Section 437 (c) by SB
470 (Jackson) of the current legislative session.
2)Equalizes the treatment of expert witness costs that are
awarded to a defendant and plaintiff after the other side's
rejection of a settlement offer made pursuant to CCP Section
998 (998 settlements) so that a court may order a defendant or
plaintiff to pay the opposing party's postoffer expert witness
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costs.
The Senate amendments:
1)Update this bill's provisions to be consistent with the
amendments to CCP Section 437 (c) that are contained in the
provisions of SB 470;
2)Add double-joining language to avoid chaptering out issues in
the event that both this bill and SB 470 are enacted;
3)Include the post-offer limitation into this bill's provisions,
allowing a court to order a plaintiff to pay their opposing
party's postoffer expert witness costs, instead of the
pre-offer and postoffer expert witness costs.
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.
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b) If the defendant rejects the plaintiff's settlement
offer pursuant to 998 settlements 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 summary adjudication of partial issues, and which
were inadvertently allowed to sunset on January 1, 2015,
including the recent amendments to CCP Section 437 (c) by SB
470. Furthermore, this bill creates equity between defendants
and plaintiffs by allowing the court to order defendants or
plaintiffs to pay their opposing party's postoffer expert
witness costs when the opposing side rejects their 998
settlement offer and receives a more favorable judgment or award
at trial.
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
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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.
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 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 Assembly Judiciary Committee introduced a non-controversial
omnibus bill, AB 1742 (Judiciary Committee), Chapter 706,
Statutes of 2005, and an amendment to this 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 Assembly Judiciary Committee
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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 Assembly 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 Assembly
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 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:
0001273