A plaintiff who sues and prevails at trial is statutorily entitled to prejudgment interest starting from the date they make a settlement offer under Code of Civil Procedure section 998 (a so-called “998 offer”) as long as that offer is “valid,” and the subsequent verdict is “more favorable” than the rejected 998 offer. (Civ. Code, § 3291; Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 698.) A 998 offer is valid only if, among other things, the offeror knew that the offeree had reasonable access to the facts necessary to “intelligently evaluate the offer.” (Id. at pp. 699-700; Najera v. Huerta (2011) 191 Cal.App.4th 872, 878 (Najera).) What factors are relevant in deciding whether the offeree had enough facts to evaluate the offer? Although courts should evaluate the totality of the facts (Arno v. Helient Corp. (2005) 130 Cal.App.4th 1019, 1026), here, the Court of Appeal concluded that three factors are especially pertinent: (1) how far into the litigation the 998 offer was made; (2) the information available to the offeree prior to the 998 offer’s expiration; and (3) whether the offeree let the offeror know it lacked sufficient information to evaluate the offer, and how the offeror responded.
The trial court yielded a total verdict of $5,594.557 in favor of Plaintiff Licudine who sought recovery of $2,335,929.20 in prejudgment interest from the date of her 998 offer to the date of judgment. The trial court struck plaintiff’s request for prejudgment interest.
On appeal, and applying these factors in this case, the Court concluded that the trial court did not abuse its discretion in finding that the plaintiff’s 998 offer was not made in good faith. Accordingly, the Court affirmed the order denying plaintiff prejudgment interest.
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Robert Rodriguez has litigated well over 100 family law cases and civil litigation matters including personal injury motor vehicle cases, dog bite and slip & fall cases, breach of contract, defamation & invasion of privacy, fraud, unfair business practice, malicious prosecution, wrongful termination, workplace and employment matters including sexual harassment, wage & hour violations, discrimination pursuant to the FEHA, Gov’t Code §§ 12940 et seq., violations of the FMLA & Pregnancy Leave, Civil Rights discrimination pursuant to 42 U.S.C. § 1983 and Title VII of the 1964 Civil Rights Act in the State of California and California federal district courts.
* Disclaimer – Robert Rodriguez is licensed to practice only in the State of California & this analysis is applied only under State of California law. Robert D. Rodriguez is also admitted to practice in the U.S. District Courts, Central, Northern & Eastern Districts of California. Robert Rodriguez has practiced in the State of California Court of Appeal.