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Saakyan v. Modern Auto10/31/2002
dgment was for defendant because that judgment was superceded by the second judgment in favor of plaintiffs. Therefore, as a matter of California civil procedure, no intervening verdict or judgment existed to expunge benefits that may have arisen from the earlier statutory offers to compromise.
We reject defendant's argument that our holding functions as a disincentive to settlement and undermines the policy behind these statutes. To the contrary, the vagaries of litigation, including the possibility of juror misconduct or reversal on appeal, which increases the opposing party's costs, are part of the risk inherent in rejecting a section 998 offer. In any event, an order for new trial does not preclude either party from attempting to settle anew, thereby fostering the public policy in favor of settlement. Furthermore, one of the foremost purposes behind Civil Code section 3291 is "to provide just compensation to the injured party for loss of use of the award during the prejudgment period--in other words, to make the plaintiff whole as of the date of the injury ." (Lakin v. Watkins Associated Industries, supra, 6 Cal.4th at p. 663.) Defendant should not be allowed to take advantage of juror misconduct (which misconduct neither plaintiffs nor defendant caused) to avoid the consequences of the risk it took, by rejecting the statutory offers to compromise and forcing the matter to trial. Otherwise, defendant would obtain a windfall at the expense of plaintiffs who could never be made whole as of the date of their injuries. Were intervening, invalid judgments to extinguish a section 998 offer, that risk would be reduced and the purposes of the statutes - - to encourage reasonable settlements in personal injury actions, reduce demand on our overburdened courts, penalize those who refuse reasonable settlement offers, and compensate plaintiff for the loss of use of the award while awaiting the outcome (ibid.; Hrimnak v. Watkins (1995) 38 Cal.App.4th 964, 980-981) -- would be undermined.
Therefore, the trial court erred as a matter of law in concluding the first judgment entered in 1995 in favor of defendant, which was vacated by the grant of a new trial, extinguished any benefits plaintiffs may have had pursuant to section 998.
2. The matter must be remanded to reconsider the motions for and against costs and prejudgment interest.
Our conclusion, that nothing about the first, vacated judgment extinguished any rights that may have arisen as the result of plaintiffs' statutory settlement offers, does not end the matter. Defendant's motion to tax costs and opposition to prejudgment interest raised a number of other arguments why the trial court should not grant plaintiffs their request for witness fees and prejudgment interest. Although the trial court mentioned two reasons for taxing costs during oral argument, the minute order cited only extinguishment as the court's reason for granting defendant's motions.
Because the court below gave no real consideration to the other arguments raised by the parties in support of and in opposition to the motion to tax costs, the trial court must revisit the issue and determine whether the offers were valid and reasonable under all of the circumstances, at the time they were was made, and if so, fix the fees and interest. (Wickware v. Tanner (1997) 53 Cal.App.4th 570, 575-576; Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699-700; Wear v. Calderon (1981) 121 Cal.App.3d 818, 821; Moffett v. Barclay (1995) 32 Cal.App.4th 980, 982-984 [invalid statutory settlement offer causes reversal of all benefits under section 998, including prejudgment interest].) We do not address the validity or reasonableness of the offers,
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