Capen v. Clinton

Filed 8/22/06 Capen v. Clinton CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a postjudgment order of the Superior Court of San Diego County, Steven Denton, Judge. Affirmed.

Plaintiff Lindsay Capen appeals from a postjudgment order awarding costs, including expert witness fees, to defendants Scott Clinton, Cathleen Clinton, and Joe Clinton (collectively Clinton). Capen contends the trial court abused its discretion by finding Clinton's Code of Civil Procedure section 998^[1] offer was reasonable and made in good faith. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

In May 2004, Capen filed a complaint apparently alleging damages caused by Clinton's negligence in connection with water leakage and mold in Capen's residence. Clinton thereafter filed an answer, subpoenaed medical records, and served form interrogatories and document requests on Capen before serving a $4,000 section 998 settlement offer via mail on December 7, 2004. Capen responded to Clinton's interrogatories and document requests but conducted no discovery of her own prior to Clinton's offer.

At some point in the fall of 2004, Capen noticed Scott Clinton's deposition for December 27, 2004, in Culver City. Clinton objected to the scheduled deposition because it exceeded statutory distance limitations^[2] and interfered with his holiday travel schedule. He nevertheless advised Capen he would make himself available for deposition after January 3, 2005. Clinton's section 998 offer expired before Scott Clinton's deposition was taken.

After a bench trial, the court found Clinton not liable to Capen for any of the alleged wrongs. Clinton served a cost memorandum seeking, among other costs, more than $28,000 in expert witness fees. Capen moved to strike or tax Clinton's requested costs in part on grounds Clinton's section 998 offer was unreasonable and made in bad faith. Specifically, Capen argued that, as of the time Clinton served his section 998 offer, she "had not had the opportunity to take one deposition in [the] matter" and thus had "absolutely no way to evaluate [Clinton's section] 998 offer when it was made." The trial court disagreed and awarded Clinton costs totaling $27,719.85. Acknowledging the parties' discovery efforts, it reasoned that "the circumstances, as known in December when the [section] 998 was made, were such that the parties had exchanged sufficient information to be aware of information leading them to conclude that there was essentially a denial of responsibility for the plaintiff's injuries and that the $4,000 [section 998 offer] was not an offer made in bad faith or in other than good faith to get the matter resolved at that point."

DISCUSSION

The legislative purpose of section 998^[3] is to encourage pretrial litigation settlements, a goal effectuated by punishing those plaintiffs failing to accept reasonable compromise offers from a defendant. (Brown v. Nolan (1979) 98 Cal.App.3d 445, 449.) A valid section 998 offer must be made in good faith; that is, an offer that is reasonable under the circumstances, carries a reasonable chance of acceptance, and is neither token nor nominal. (Wear v. Calderon (1981) 121 Cal.App.3d 818, 821; Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1262.) Offers extended at no real risk and with the sole motivation of recovering expert witness fees posttrial are made in bad faith. (Pineda v. Los Angeles Turf Club, Inc. (1980) 112 Cal.App.3d 53, 63; Jones, at pp. 1262-1263.)

The reasonableness of a section 998 offer is determined by considering the circumstances at the time of the offer and the information used to evaluate it. (Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699 (Elrod).) The inquiry is two-fold: The first question is "whether the offer represents a reasonable prediction of the amount of money, if any, defendant would have to pay plaintiff following a trial, discounted by an appropriate factor for receipt of money by plaintiff before trial, all premised upon information that was known or reasonably should have been known to the defendant." (Ibid.) If the offer withstands scrutiny under the first prong, "it must then satisfy a second test: whether defendant's information was known or reasonably should have been known to plaintiff. If the offeree has no reason to know the offer is reasonable, then the offeree cannot be expected to accept the offer." (Ibid.) Whether a section 998 offer was reasonable and made in good faith is a decision left to the sound discretion of the trial court, which we review for abuse of discretion. (Tech-Bilt, Inc. v. Woodward-Clyde Associates (1985) 38 Cal.3d 488, 502.) A discretionary decision of the trial court is disturbed on appeal only where no judge, considering all the circumstances, could reasonably have reached the same result. (Smith v. Smith (1969) 1 Cal.App.3d 952, 958.)

In the present case, Clinton obtained a judgment more favorable than his section 998 offer, a result serving as prima facie evidence of reasonableness and placing the burden on Capen to overcome that presumption by demonstrating otherwise. (Elrod, supra, 195 Cal.App.3d at p. 700.) As we explain, however, Capen has failed to meet this burden. Capen does not meaningfully challenge the trial court's finding of reasonableness under the first prong; that is, whether Clinton's section 998 offer was a reasonable prediction of his potential monetary liability to Capen after trial. (Id. at p. 699.) To the extent she seeks to make such arguments in her reply brief, we conclude Capen has shown nothing suggesting Clinton's $4,000 section 998 offer was in any way a blithe gesture at compromise approaching the level of unreasonableness requisite to classify the offer as nominal or token. (Wear v. Calderon, supra, 121 Cal.App.3d at p. 821 & fn. 3 [finding a $1 settlement offer unreasonable]; Pineda v. Los Angeles Turf Club Inc., supra, 112 Cal.App.3d at pp. 62-63 [holding a $2,500 offer unreasonable given plaintiff's prayer for $10 million in relief].)

Capen primarily contends Clinton's section 998 offer was unreasonable because she lacked sufficient information to evaluate it without taking Scott Clinton's deposition. Specifically, Capen claims Scott Clinton admitted liability in pre-litigation statements to her and she could not reasonably have known he would later deny those admissions in his deposition – a deposition she had no reasonable opportunity to take because the matter was still "in its early stages" and because of Clinton's bad faith tactics to delay the deposition until after expiration of his offer.

At the outset, we reject Capen's contention on grounds its factual underpinning – Scott Clinton's alleged "off the record" admissions of fault to her – is entirely lacking foundational support in the record. Capen's assertion, which was raised for the first time in her reply points and authorities before the trial court, is unsupported by any sworn declaration attesting to Capen's asserted knowledge or belief regarding any such statements. Having only sheer argument before it, the trial court was well within its discretion to disregard Capen's claim.

Even assuming factual support for Clinton's purported statements existed, Capen's contention fails on the merits as well. The standard for assessing whether Capen possessed sufficient information to adequately evaluate Clinton's section 998 offer is an objective one; namely, what Capen knew or should have known at the time of the offer. (Elrod, supra, 195 Cal.App.3d at p. 700.) Objectively, the trial court could reasonably conclude Capen had ample opportunity to ascertain Clinton would deny liability, or more specifically, deny making his alleged statements, before his section 998 offer expired. The record indicates that after commencing the action in May 2004, Capen waited nearly seven months to notice Scott Clinton's deposition and conducted no discovery of her own during that time. There is no evidence she was in any way hampered or prevented from conducting discovery during that period. Further, there is no basis to characterize the delay of Scott Clinton's deposition as bad faith dilatory tactics. Clinton asserted legitimate objections to a deposition scheduled in violation of statutory distance limitations, (§ 2025.250, subd. (a)) and he reasonably made himself available for his deposition after January 3, 2005. Given the holidays and statutory 5-day acceptance extension for section 998 offers served by mail, Clinton's offer did not expire until approximately January 20, 2005. (§§ 10, 11, 1013, subd. (a); Gov. Code, §§ 6700-6702; Poster v. Southern Calif. Rapid Transit Dist. (1990) 52 Cal.3d 266, 274.) Capen could have rescheduled the deposition and learned of Scott Clinton's defense position before his section 998 offer expired in mid-January. (§ 2025.270, subds. (a) & (c).)

Finally, Capen argues her lawsuit was "premised" on Clinton's alleged statements; that the purported "incriminating statements . . . were the inception of [her] action." Because the pleadings are not in the record, we presume in favor of the judgment that such allegations were included in her complaint and either generally or specifically denied in Clinton's answer. (Wilson v. Sunshine Meat & Liquor Co. (1983) 34 Cal.3d 554, 563; Smith v. Smith, supra, 1 Cal.App.3d at p. 958; § 431.30, subd. (b)(1).) As an objective matter, Capen should have known Clinton would deny any liability based upon any such statements simply by the legal effect of the pleadings.

In reviewing the reasonableness of a section 998 offer, we may not substitute our opinion for that of the trial court unless there was a clear abuse of discretion resulting in a miscarriage of justice. (Thompson v. Miller (2003) 112 Cal.App.4th 327, 339.) On this record, the trial court reasonably concluded Capen was charged with sufficient knowledge to rationally consider the compromise because she reasonably should have known Clinton would deny liability at the time of his section 998 offer. Capen has not demonstrated the trial court clearly abused its discretion in awarding costs to Clinton.

DISPOSITION

The order is affirmed.

O'ROURKE, J.

WE CONCUR:

McCONNELL, P. J.

IRION, J.

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^[1] All statutory references are to the Code of Civil Procedure unless otherwise specified.

^[2] Clinton incorrectly cited section 2030, subdivision (e)(1). The apposite code section for his objection at the time was section 2025, subdivision (e)(1), which is now section 2025.250, subdivision (a).

^[3] Section 998, subdivision (c), provides in part: "If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment, the plaintiff shall not recover his or her costs and shall pay the defendant's costs from the time of the offer . . . In addition . . . the court, in its discretion, may require the plaintiff to pay the defendant's costs from the date of filing of the complaint and a reasonable sum to cover costs of the services of expert witnesses . . . ."