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Expert Fees May Be Recoverable Even if Multiple 998 Offers Served

Section 998 of the Code of Civil Procedure was enacted to encourage the settlement of lawsuits prior to trial. The statute accomplishes this purpose by providing for augmentation and withholding of the costs recoverable at trial when a party fails to achieve a result better than it could have obtained by accepting an offer of compromise or settlement conforming to statutory requirements. Among other things, section 998 provides that a defendant may be ordered to pay a reasonable sum to cover the plaintiff’s postoffer costs of expert witness services when the judgment is not more favorable than the plaintiff’s settlement offer. Martinez v. Brownco Constr. Co., (2013) 2013 Cal. LEXIS 4698

In Martinez, (supra), the California Supreme Court took on the issue as to the effect of serving upon your opponent multiple 998 offers.

Martinez revolved around Mr. Martinez whom was injured when an electrical explosion occurred. Mrs. Martinez claimed a loss of consortium, arising out of her husband’s injuries. Mr. Martinez offered to compromise his claim for $4.75 million, Mrs. Martinez for $250,000.00. Both of these offers were made pursuant to Section 998 and both rejected by the defendants.

As the litigation progressed, the Martinez’s revised their 998 Offers, seeking $1.5 million and $100,000 repsectively.

The jury found for the plaintiffs as follows: Mr. Martinez $1,646,674; Mrs. Martinez, $250,000.

After trial, plaintiffs sought to recover costs totaling $561,536.86, which included $188,536.86 in expert fees.

The Supreme Court ultimately held that, where a plaintiff makes two successive statutory offers, and the defendant fails to obtain a judgment more favorable than either offer, the plaintiff may recover expert fees incurred from the date of the first offer. The Court further held that doing such was consistent with the language and statutory purpose of Section 998.

The Supreme Court affirmed the judgment of the Appellate Court which had permitted plaintiffs to recover the requested $561,536.86.

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