IN THE SUPREME COURT OF
CALIFORNIA
VADIM GOROBETS,
Plaintiff and Appellant,
v.
JAGUAR LAND ROVER NORTH AMERICA, LLC,
Defendant and Respondent.
S287946
Second Appellate District, Division Two
B327745
Los Angeles County Superior Court
19STCV11540
August 6, 2026
Justice Corrigan authored the opinion of the Court, in which
Chief Justice Guerrero and Justices Liu, Kruger, Groban,
Evans, and Feuer* concurred.
*
Associate Justice of the Court of Appeal, Second Appellate
District, Division Seven, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA,
LLC
S287946
Opinion of the Court by Corrigan, J.
Generally, the right to recover costs at the conclusion of a
civil action belongs to the “prevailing party,” as defined by
statute. (Code Civ. Proc., § 1032, subd. (b).)1 To incentivize the
early settlements of lawsuits, section 998 modifies this general
rule and penalizes a party who rejects an opponent’s valid
statutory offer to compromise (998 offer) by shifting the liability
for costs when the rejecting party “fails to obtain a more
favorable judgment or award” after further litigation. (§ 998,
subds. (c)(1), (d), (e).) Under a well-established test developed
by our lower courts, a 998 offer is valid for cost-shifting purposes
only if its terms are sufficiently certain or specific to permit the
offeree and the trial court to assess its value as of the time the
offer was made. (Valentino v. Elliott Sav-On Gas, Inc. (1988)
201 Cal.App.3d 692, 698 (Valentino); Fassberg Construction Co.
v. Housing Authority of City of Los Angeles (2007) 152
Cal.App.4th 720, 764 (Fassberg).)
Section 998 permits a party to make a subsequent offer
after a previous one has been rejected. (Martinez v. Brownco
Construction Co. (2013) 56 Cal.4th 1014, 1017 (Martinez).) It
does not directly address the possibility of presenting two sets
1
See Code of Civil Procedure section 1032, subdivision
(a)(4) (defining “ ‘[p]revailing party’ ”). All undesignated
statutory references are to the Code of Civil Procedure.
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Opinion of the Court by Corrigan, J.
of alternative terms in a single offer, as occurred here. The
specific question in this case is whether a single 998 offer that
presents two independent and alternative sets of terms and
grants the offeree the right to accept by choosing between them
is categorically nonconforming because an offer structured in
that way lacks sufficient certainty. We hold that such a 998
offer can be valid so long as (1) the offer is structured so that it
clearly presents the alternatives available to the offeree, and
(2) at least one of the two independent sets of terms is
sufficiently certain to permit an accurate valuation at the time
the offer is made. Once validity is established, the court must
determine whether section 998 cost shifting has been triggered
by asking whether the party who rejected the 998 offer “fail[ed]
to obtain a judgment or award more favorable” than the highest
value, valid alternative proposed. (Id., subds. (c)(1), (d), (e).)
We reject the Court of Appeal’s analysis and conclusion
that alternative-choice offers are inherently uncertain, making
them categorically prohibited by section 998. We affirm that
portion of the judgment upholding the trial court’s award.
I. BACKGROUND
A. The Lease Agreement and Lawsuit
In October 2015, plaintiff Vadim Gorobets signed a lease
agreement with defendant Jaguar Land Rover North America,
LLC, for a new 2016 Land Rover LR4 priced at $59,474. The
lease provided for 42 monthly payments totaling $32,502.54,
with an option to purchase for $37,300.14 at lease end. During
the first six months, the vehicle displayed major “defects and
nonconformities,” including “steering, suspension, engine,
exterior, electrical, structural, transmission, HVAC, interior
and brake[] defects.” Despite being given adequate opportunity,
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Opinion of the Court by Corrigan, J.
defendant’s repair facilities were unable to resolve the issues,
and the problems persisted. After defendant failed to replace
the vehicle promptly or make restitution in accordance with
Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et
seq.; the Act or Song-Beverly Act),2 plaintiff sued for express and
implied breach of warranty, and breach of the duty to return the
vehicle from service without defects within 30 days.3 Plaintiff
sought restitution, incidental and consequential damages, civil
penalties, and prejudgment interest, along with attorney fees
and costs.
B. Proceedings Before the Trial Court
On October 15, 2020, defendant made a section 998 offer
proposing two alternative sets of settlement terms.4 The first
choice was a simple lump-sum payment. Defendant would agree
to pay $85,000 for the vehicle’s return with a clear title. The
second choice was less straightforward. Defendant agreed to
“reimburse” plaintiff for expenses he incurred in several
categories that largely track restitution remedies available
under the Act. These amounts included “transportation”
2
The Song-Beverly Act imposes an “obligation” on a car
manufacturer “to ‘promptly’ repurchase or replace a defective
vehicle it is unable to repair.” (Kirzhner v. Mercedes-Benz USA,
LLC (2020) 9 Cal.5th 966, 971.) The buyer of the defective
vehicle may “elect restitution in lieu of replacement, and in no
event shall the buyer be required by the manufacturer to accept
a replacement vehicle.” (Civ. Code, § 1793.2, subd. (d)(2).)
3
The complaint also named as defendant Terry York Motor
Cars, Ltd., doing business as Land Rover of Encino, (the
company where he leased the vehicle and brought it in for
repairs), but plaintiff later dismissed the dealership.
4
This was defendant’s second 998 offer. Neither party
contends that the first was a valid statutory offer of compromise.
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Opinion of the Court by Corrigan, J.
charges, “manufacturer-installed options,” “loan interest, rental
charges, and any collateral charges such as sales tax, license
fees, registration fees, and other official fees.” Although the Act
permits the manufacturer to apply a mileage use offset (see Civ.
Code, § 1793.2, subd. (d)(2)(C)), defendant offered to waive it.
Additionally, defendant agreed to pay any “incidental or
consequential damages” to which plaintiff was entitled under
Civil Code section 1793.2, as well as any amount owed on a loan
or any other amount necessary for the return of the vehicle with
a clear title. However, the terms of the second alternative
required plaintiff to itemize and provide proof of all claimed
reimbursement amounts. If there was a dispute as to plaintiff’s
“legal entitlement and/or the amounts recoverable . . . after
submission of the itemization and proof of same,” defendant
would agree to pay any undisputed amounts. The parties would
then “allow the Court to determine” what additional amount
was called for by the offer, “either by motion, bench trial, jury
trial, expedited jury trial under Rule 3.1545 of the Rules of
Court, or by referee under Code of Civil Procedure § 638.”
Plaintiff would choose the dispute resolution process and bear
“the burden of proof by a preponderance of the evidence for legal
entitlement and amount of damages sought.”
Both alternatives provided defendant would also waive its
own costs and pay either $7,500 for plaintiff’s attorney fees and
costs or, at plaintiff’s election, have the reasonable amount for
fees and costs be determined by the court pursuant to the Act,
with plaintiff designated as the prevailing party. (See Civ. Code,
§ 1794, subd. (d).) Regardless of the alternative chosen, plaintiff
would request dismissal of the entire action with prejudice
within five business days after receiving the payments. The last
page of the 998 offer included a table listing the terms of each
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Opinion of the Court by Corrigan, J.
alternative. To accept the offer, plaintiff was required to check
a box next to the alternate set of terms selected and sign the
form. In the end, plaintiff chose neither alternative and allowed
the 998 offer to expire.
A jury subsequently awarded plaintiff a net total of
$76,155.27 in damages.5 Following entry of judgment, both
sides filed to recover costs and to strike or tax those sought by
the other party. As the prevailing party, plaintiff sought to
recover $76,118.32 in general costs and $543,413.34 in attorney
fees as provided by the Act.6 Defendant contended plaintiff was
not entitled to postoffer costs because he rejected its valid 998
offer and then failed to achieve a more favorable outcome.
5
Specifically, the jury awarded $69,576.65 for plaintiff’s
base payments, $1,947.82 in finance charges, $3,681.12 in taxes
and fees, and $4,828 in incidental damages. It reduced the
award by $3,878.32 for vehicle usage. The jury did not find
defendant willfully violated the Act, so awarded no penalties.
6
Section 1032 provides: “Except as otherwise expressly
provided by statute, a prevailing party is entitled as a matter of
right to recover costs in any action or proceeding.” (§ 1032, subd.
(b).) The “ ‘[p]revailing party’ ” is “the party with a net monetary
recovery, a defendant in whose favor a dismissal is entered, a
defendant where neither plaintiff nor defendant obtains any
relief . . . , a defendant as against those plaintiffs who do not
recover any relief against that defendant,” or, in other
situations, the party the court determines to be the prevailing
party in its discretion. (§ 1032, subd. (a)(4).) Section 1033.5 sets
out the items that are “allowable as costs under Section 1032.”
(§ 1033.5, subd. (a).) Among those items are attorney fees, when
authorized by statute. (§ 1033.5, subd. (a)(10)(B).) The Act
authorizes a court to award “attorney’s fees based on actual time
expended” to a prevailing buyer in an action which, like this one,
is brought under Civil Code section 1794, subdivision (a). (Civ.
Code, § 1794, subd. (d).)
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GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
Defendant sought to recover $14,612.17 of its postoffer costs and
limit plaintiff to his pre-offer sums. Plaintiff challenged
defendant’s 998 offer as invalid because its terms lacked
sufficient specificity to permit accurate valuation.
The trial court ruled defendant’s 998 offer was valid
because “[a]t the time the offer was made, Plaintiff was provided
with a sufficiently specific and unconditional offer of $85,000.00,
which he chose not to accept.” In an amended judgment
incorporating the general cost and attorney fee awards, the trial
court imposed the cost-shifting penalty and limited plaintiff to
his pre-offer costs of $5,238.22 and pre-offer attorney fees of
$22,492. It awarded defendant its postoffer costs of $14,591.77.7
Plaintiff timely appealed. The Court of Appeal affirmed the trial
court’s ultimate awards as explained below.
C. Court of Appeal Opinion
The Court of Appeal construed defendant’s proposal as
constituting two “simultaneous offers.”8 (Gorobets, supra, 105
7
As the Court of Appeal observed, because of a
typographical error, the court’s final order awarded plaintiff $45
more than the figure in its cost order. The parties do not
challenge this windfall. (Gorobets v. Jaguar Land Rover North
America, LLC (2024) 105 Cal.App.5th 913, 924, fn. 6 (Gorobets).)
8
A note as to terminology. As explained in greater detail
below, referring to the 998 offer here as two “simultaneous
offers” is both inaccurate and potentially confusing. (See post,
pp. 12–14, 18–19.) It is better understood as a single offer
proposing two distinct sets of alternative terms and permitting
the offeree to choose between them. (H.S. Crocker Co. v.
McFaddin (1957) 148 Cal.App.2d 639, 645 (H.S. Crocker); see
also 1 Witkin, Summary of Cal. Law (11th ed. 2017) Contracts,
§ 137, p. 177; Rest.2d Contracts, § 30, com. c, p. 85; 1 Williston
6
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
Cal.App.5th at p. 927.) The court acknowledged that “ ‘[n]othing
in the wording of section 998 prevents a [party] from making
more than one compromise offer’ to the same opposing party.”
(Ibid.) It went on to observe, however, that: “[t]ypically,
litigants make multiple offers seriatim — that is, one at a time;
when they do, the most recent offer is usually the operative offer
that controls for purposes of evaluating whether the subsequent
judgment is more or less favorable.” (Ibid.) The majority held
that section 998 does not allow a party to make what it
characterized as “multiple offers to the same party at the same
time.” (Ibid.)
Despite its conclusion that the alternative-choice offer
here actually constituted two separate offers, the court went on
to determine that the second alternative presented in this case
was not sufficiently amenable to valuation, thus rendering it
“independently” invalid. (Gorobets, supra, 105 Cal.App.5th at
p. 936; see id. at pp. 930–934.) It then concluded it was left to
consider only the one valid lump sum alternative, which the
parties did not dispute was independently capable of fair
valuation, and which plaintiff did not exceed at trial. (Id. at
pp. 934–935.) As a result, it affirmed the trial court’s order
imposing the cost-shifting penalty on plaintiff who rejected
on Contracts (4th ed. 2022) § 4:22, pp. 532–539.) Defendant
occasionally refers to it as a “multi-option” offer, but this too is
potentially confusing because, under contract law, an “option”
can denote: “An offer that is included in a formal or informal
contract; esp., a contractual obligation to keep an offer open for
a specified period, so that the offeror cannot revoke the offer
during that period.” (Black’s Law Dict. (12th ed. 2024) p. 1316,
col. 2.) Therefore, except when quoting the courts below or the
parties, we instead use the shorthand term “alternative-choice
offer” or “alternative-choice 998 offer.”
7
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
defendant’s 998 offer. (Id. at p. 936.) A partial dissent
concurred in the holding that a 998 offer is “not ‘sufficiently
certain if it consists of two offers made at the same time to the
same party and leaves it to the offeree which offer to accept.’ ”
(Id. at p. 937 (dis. opn. of Ashmann-Gerst, Acting P. J.).) The
dissent would have ended the analysis there and reversed the
trial court order awarding postoffer costs to defendant. (Ibid.)
It declined to join the majority’s other conclusions. (Ibid.)
We affirm the ultimate judgment but disapprove the
majority’s analysis and holding that section 998 categorically
prohibits making a single offer with two sets of alternatives.
II. DISCUSSION
The sole question presented here is whether a settlement
offer that permits an offeree to choose between two distinct sets
of settlement terms as a form of acceptance can qualify as a valid
offer for cost-shifting purposes under section 998.9 We hold that
such an offer, which meets the statutory provisions and is
sufficiently clear to permit valuation, can be valid, so long as it
satisfies the requirements set out here.
A. The Statutory Language of Section 998 Does Not
Prohibit Alternative-choice Offers
The right to recover civil litigation costs is governed by
statute. (Madrigal v. Hyundai Motor America (2025) 17 Cal.5th
592, 602 (Madrigal).) Generally, section 1032, subdivision (b)
9
Neither side sought review on the other question
addressed by the Court of Appeal regarding the validity of the
dispute-resolution alternative presented in defendant’s 998
offer. Thus, we assume without deciding that this second
settlement alternative is independently invalid under section
998.
8
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Opinion of the Court by Corrigan, J.
entitles a “prevailing party” to recover its costs, and section
1033.5 identifies the allowable cost items, including attorney
fees that are authorized by statute. (See p. 5, fn. 6, ante.)
Section 998 significantly modifies this general rule. As relevant
here, section 998 provides that a plaintiff who does not accept a
defendant’s valid offer of compromise, then fails to obtain a more
favorable judgment or award at the conclusion of the litigation
“shall not recover their postoffer costs and shall pay the
defendant’s costs from the time of the offer.” (§ 998, subd. (c)(1).)
The statute also grants the court discretion to order the plaintiff
to pay defendant’s postoffer expert witness fees. (Ibid.) The
purpose of this “carrot and stick” approach is to promote early
pretrial settlements, “avoid the time delays and economic waste
associated with trials[,] and . . . reduce the number of meritless
lawsuits.” (Martinez, supra, 56 Cal.4th at p. 1019.)
Whether section 998 permits an offer of compromise that
proposes a choice between two sets of alternative settlement
terms is a question of statutory interpretation, which we review
de novo. (Madrigal, supra, 17 Cal.5th at p. 602.) “When
interpreting a statute, ‘ “[w]e first examine the statutory
language, giving it a plain and commonsense meaning.”
[Citation.] We do not consider statutory language in isolation;
instead, we examine the entire statute to construe the words in
context. [Citation.] If the language is unambiguous, “then the
Legislature is presumed to have meant what it said, and the
plain meaning of the language governs.” [Citation.] “If the
statutory language permits more than one reasonable
interpretation, courts may consider other aids, such as the
statute’s purpose, legislative history, and public policy.” ’ ”
(Ibid.)
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GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
“Section 998 addresses some, but not all, of the aspects of
the offer and acceptance process.” (T. M. Cobb Co. v. Superior
Court (1984) 36 Cal.3d 273, 279 (T. M. Cobb Co.).) For instance,
the statute provides that a qualifying offer must be in writing
and served on the offeree at least 10 days before a trial or
arbitration. (§ 998, subd. (b).) It must also include “a statement
of the offer, containing the terms and conditions of the judgment
or award, and a provision that allows the accepting party to
indicate acceptance of the offer by signing a statement that the
offer is accepted. Any acceptance of the offer, whether made on
the document containing the offer or on a separate document of
acceptance, shall be in writing and shall be signed by counsel for
the accepting party or, if not represented by counsel, by the
accepting party.” (Ibid.) Nothing in this statutory language
prohibits a valid offer from proposing two alternative sets of
terms, either of which an offeree may choose to accept.
Plaintiff nonetheless argues that by phrasing its
requirement as “a statement of the offer” (§ 998, subd. (b))
rather than using the plural term “offers,” the Legislature
indicated an intent to prohibit alternative-choice offers. As
plaintiff readily concedes, however, section 17, subdivision (a)
makes clear that “[w]ords used in the code in . . . [t]he singular
number includes the plural and the plural number includes the
singular.” (See Gorobets, supra, 105 Cal.App.5th at p. 928.)
Undeterred, plaintiff claims the statutory language
contains other indications that the Legislature intended to bar
alternative-choice offers. He points to section 998, subdivision
(b)(1), which provides, “If the offer is accepted, the offer with
proof of acceptance shall be filed and the clerk or the judge shall
enter judgment accordingly.” Plaintiff claims these provisions
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Opinion of the Court by Corrigan, J.
demonstrate that a 998 offer must be “simple and
straightforward enough such that it is a purely ministerial act
for a court clerk to enter judgment on it,” but “the inclusion of
complex, questionably valid options . . . cannot be simply
entered as judgments because they . . . require further litigation
to determine their value. [Citation.] In fact, . . . nothing
precludes an especially opportunistic litigant from making five,
eight, or even ten such options — all of which the offeree and the
court will have to evaluate.” Plaintiff’s argument is
unpersuasive because it confuses entirely different judicial
tasks undertaken at different times and under different
circumstances.
To begin, we have never held that an offer must be
“simple.” If an accepted offer along with proof of acceptance is
filed with the court, the judge or clerk “shall enter judgment” “in
accordance with the terms and conditions stated.” (§ 998,
subd. (b)(1).) That entry of judgment is a straightforward
ministerial act. Before entering judgment, the statute does not
require, or authorize, the court to adjudicate possible disputes
over the terms of the 998 offer. (See Bias v. Wright (2002) 103
Cal.App.4th 811, 819.) If a dispute later arises over the terms
of an offer that has been accepted and judgment entered, the
court may then be called upon to determine the validity of the
settlement contract and interpret its terms. In making that
determination, the court construes the parties’ own agreed-upon
11
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terms to determine the rights and obligations legally created by
the parties’ contract of settlement.10
B. An Offer Requiring a Selection Between Distinct
Sets of Terms for Acceptance Is Not Inherently
Uncertain nor Does It Defeat the Purpose of
Section 998
“When the language of section 998 does not provide a
definitive answer for a particular application of its terms, courts
may consult and apply general contract law principles. Because
the process of settlement and compromise is a contractual one,
such principles may, in appropriate circumstances, govern the
offer and acceptance process under section 998.” (Martinez,
supra, 56 Cal.4th at p. 1020.) General contract principles will
be controlling so long as they “neither conflict with the statute
nor defeat its purpose.” (T. M. Cobb Co., supra, 36 Cal.3d at
p. 280.) When application of a general contract principle would
defeat the purpose of the scheme, a rule specifically tailored to
10
For example, in Roden v. Bergen Brunswig Corp. (2003)
107 Cal.App.4th 620, the plaintiff accepted his former
employer’s hastily drafted 998 offer and a judgment
“encapsulating” its terms was entered. (Id. at p. 623.) Later, a
dispute arose between the parties as to the meaning of its terms
and plaintiff filed a motion to enforce the judgment. (Id. at p.
624.) Based on its “construction of the contract, and thus its
interpretation of the judgment,” the trial court entered an order
favorable to plaintiff. (Ibid.) Affirming this postjudgment order,
the Court of Appeal confirmed that courts should “apply general
contract principles to the interpretation of a section 998
judgment. [Citation.] ‘ “[A] stipulation or consent judgment,
being regarded as a contract between the parties, must be
construed as any other contract.” ’ ” (Ibid., quoting Lanyi v.
Goldblum (1986) 177 Cal.App.3d 181, 184, fn. 3.)
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the section 998 context may be necessary. For example, T. M.
Cobb Co. applied general contract principles to hold that 998
offers are revokable at any time before acceptance or expiration,
because that interpretation increases the chances for
settlement. (See also Palmer v. Schindler Elevator Corp. (2003)
108 Cal.App.4th 154 [applying the general rule in another
section 998 context].) By contrast, Poster v. Southern Cal. Rapid
Transit Dist. (1990) 52 Cal.3d 266, 272 declined to apply a
general contract principle that would inhibit settlement
negotiations. (See also One Star, Inc. v. STAAR Surgical Co.
(2009) 179 Cal.App.4th 1082 [adopting a specific 998 rule to
encourage offers and increase chances of settlement].)
Although the application of general contract principles
will not always suffice in the section 998 context, a well-
established principle is serviceable here to achieve the
Legislature’s aim. An “offer may contain a choice of terms from
which the offeree is given the right to make a selection in his
acceptance,” and the “acceptance of one alternate proposition
constitutes a binding contract.” (H.S. Crocker, supra, 148
Cal.App.2d at p. 645; see also Rest.2d Contracts, § 30, com. c,
p. 85; 1 Williston on Contracts, supra, § 4:22, pp. 532–539.) The
998 offer at issue neatly fits this description. Plaintiff had the
choice between two self-contained, mutually exclusive sets of
contractual terms: a lump sum payment or a more complex
alternative that required proof of particularized damages
claimed and a framework for resolution of any disagreements
over the adequacy of proof. As presented, if plaintiff wished to
accept either alternative, counsel was to check a box next to the
set of terms accepted and sign the offer. The offer did not give
plaintiff the right to mix and match terms to create a new set of
his preferred alternatives. On these facts, his statutorily
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Opinion of the Court by Corrigan, J.
compliant acceptance of either set of the terms presented would
have formed an enforceable contract between the parties and
been filed with the court for entry of judgment as the statute
provides.
Echoing the Court of Appeal’s analysis, plaintiff contends
that a specific rule is needed in these types of section 998 cases.
He insists that a 998 offer containing alternative sets of terms
presented for acceptance is inherently uncertain and precludes
accurate valuation either by the offeree when considering it or
by the trial court when later comparing the value of a rejected
offer to the ultimate judgment or award. He repeats the claims
that alternative-choice 998 offers will discourage settlement,
invite gamesmanship, and impose burdens on the trial courts.
His arguments are unpersuasive.
1. The Court of Appeal’s Uncertainty Analysis
Section 998, subdivision (c) effectuates the policy of
encouraging settlement by creating a strong financial incentive
for parties to make reasonable settlement offers and a strong
financial disincentive for them to reject such offers. (Bank of San
Pedro v. Superior Court (1992) 3 Cal.4th 797, 804.) This
incentive structure only works, however, if an offer’s worth can
be reasonably calculated when it is being considered by the
offeree, as well as in hindsight when the trial court compares
the value of a rejected offer and the ultimate judgment or award.
Our lower courts have developed a two-part test to determine if
an offer’s terms are sufficiently certain for such purposes (see
Fassberg, supra, 152 Cal.App.4th at p. 764; see also Valentino,
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supra, 201 Cal.App.3d at pp. 700–701), a test we adopt as our
own.11
A 998 offer’s terms must be sufficiently certain in two
ways to trigger cost shifting. First, the terms must enable the
offeree to meaningfully “evaluate it and make a reasoned
decision whether to accept it, or reject it and bear the risk he
may have to shoulder his opponent’s litigation costs and
expenses.” (Berg v. Darden (2004) 120 Cal.App.4th 721, 727
(Berg).) Without the ability to judge the concrete value of an
offer, the offeree cannot make a practical decision whether to
accept it.
Second, the terms presented must allow a court to
subsequently determine whether the secured judgment or
11
Lower courts have also held that a valid 998 offer must be
unconditional. (Barella v. Exchange Bank (2000) 84
Cal.App.4th 793, 799.) Additionally, it has been held that a
rejecting offeree may avoid cost-shifting penalties if it can show
the offer was not made in good faith, because it had no
reasonable prospect of acceptance. (Licudine v. Cedars-Sinai
Medical Center (2019) 30 Cal.App.5th 918, 924.) Licudine
explained that there are two aspects of the good faith inquiry.
First, whether the offer “was . . . within the ‘range of reasonably
possible results’ at trial, considering all of the information the
offeror knew or reasonably should have known.” (Id. at pp. 924–
925.) Second, whether the offeror knew “that the offeree had
sufficient information, based on what the offeree knew or
reasonably should have known, to assess whether the ‘offer
[was] a reasonable one,’ such that the offeree had a ‘fair
opportunity to intelligently evaluate the offer.’ ” (Id. at p. 925.)
These two considerations allow the court to assess whether the
offer was reasonable and thus validly made. (Id. at pp. 924–
925.) Plaintiff has not alleged the offer at issue was conditional
or made in bad faith, so we have no occasion to consider the
soundness or test the application of these doctrines here.
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award is more favorable than the offer. The availability of the
cost-shifting penalty depends on whether the offeree failed to
exceed the terms it rejected. (Fassberg, supra, 152 Cal.App.4th
at p. 764.) Thus, in deciding whether to impose the penalty, the
court must be able to place a fair value on the rejected offer. If
a settlement offer “contains terms that make it ‘exceedingly
difficult or impossible to determine the value of the offer[,] . . . a
court should not undertake extraordinary efforts to attempt to
determine whether the judgment is more favorable to the
plaintiff. Instead, the court should conclude that the offer is not
sufficiently specific or certain to determine its value and deny
cost shifting under . . . section 998.’ ” (Khosravan v. Chevron
Corp. (2021) 66 Cal.App.5th 288, 295.) Further, under both
prongs of the certainty inquiry, the valuation of the offer is
measured as of the time it was made “and without the benefit of
hindsight.” (Valentino, supra, 201 Cal.App.3d at p. 698.) On a
motion to strike or tax costs, the burden is on the offeror to prove
the offer’s terms were sufficiently certain or specific.
(Khosravan, at p. 294.)
There is nothing inherently uncertain about asking an
offeree to evaluate alternative sets of settlement terms before
deciding whether to accept either or neither of them. The Court
of Appeal agreed that an alternative-choice offer may clear this
first uncertainty hurdle. (Gorobets, supra, 105 Cal.App.5th at
p. 928.) However, according to the Court of Appeal, the trial
court’s postjudgment task of comparing the value of alternative-
choice offers against a secured judgment is not so easy. For that
reason, it interpreted section 998 to bar alternative-choice offers
categorically, even though the statute is silent on the subject.
To explain its conclusion, the court posed the following
hypothetical.
16
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
The court assumed a situation in which “an offeror makes
two simultaneous offers to settle a case — one to pay a lump sum
of $100,000 and another to pay a lump sum of $200,000.”
(Gorobets, supra, 105 Cal.App.5th at p. 928.) If the
“simultaneous offers” were rejected and “the jury returns a
verdict for the offeree of $150,000,” the court asked rhetorically:
“how is the court to assess whether the offeror did better or
worse than the verdict?” (Id. at p. 929.) The court expounded:
“The verdict is between the $100,000 and $200,000 offers, and is
accordingly worse for the offeror than one offer but better than
the other. Because the offers were made at the same time, a
court cannot rely on the timing of the offers to dictate which is
the operative one.” (Ibid.) Thus, the court concluded
alternative-choice offers, while “not practically unprecedented,”
are “legally ineffective [for cost-shifting purposes] under section
998.” (Id. at p. 930.)
The hypothetical is problematic in several ways and
appears to have skewed the Court of Appeal’s analysis. First, it
is difficult to imagine that, all things being equal, an offeree
would select a $100,000 offer over a $200,000 one. To be
serviceable, the hypothetical would have to also assume that the
offer contained additional terms in one or both of the
alternatives to distinguish between them. We will not speculate
or opine on whether and how such an additional, unarticulated
level of complexity might render one or both of the proposed
alternatives insufficiently specific. Here, we encounter a single
offer by a defendant that proposed a settlement based on
plaintiff’s choice between two distinct alternatives.
Another difficulty with the court’s hypothetical is that it
considers whether the achieved result was better or worse “for
17
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
the offeror.” (Gorobets, supra, 105 Cal.App.5th at p. 929.) This
approach rhetorically demands an answer to the wrong
question. In order to allow cost shifting in a case like this one,
the court must consider whether the judgment or award secured
was less favorable than the offer that was rejected or allowed to
lapse. (§ 998, subds. (c)(1), (d).) If the result ultimately secured
by a rejecting offeree does not exceed the value of the offer, the
court may impose cost shifting.
The Court of Appeal’s analysis was also flawed to the
extent it characterized Jaguar’s proposal as “two simultaneous
offers.” (Gorobets, supra, 105 Cal.App.5th at p. 927, italics
added.) Viewing it in this way led the Court of Appeal to
conclude that simultaneous 998 offers are categorically too
uncertain because, when “offers [are] made at the same time, a
court cannot rely on the timing of the offers to dictate which is
the operative one.” (Id. at p. 929.) We reject the
characterization of Jaguar’s proposal as presenting “two
simultaneous offers” because it implies Gorobets could have
accepted both sets of terms if he wished, which was clearly not
the case. The offer expressly required a choice between the
alternatives as the only permissible form of acceptance. (See Civ.
Code, § 1582 [“If a proposal prescribes any conditions concerning
the communication of its acceptance, the proposer is not bound
unless they are conformed to . . .”].) As explained above, we hold
that, consistent with general contract principles, an offer that
permits an offeree to accept by selecting between two discrete
alternatives is best understood as a single offer for section 998
purposes. Viewing it as a single offer, however, should not
inhibit a trial court from independently analyzing each
alternative set of terms even though they are presented
18
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
concurrently.12
In ruling on a contested section 998 motion involving an
alternative-choice offer, the court’s first step is to determine
whether the alternative-choice 998 offer is clearly presented and
calls for the offeree to select between expressly delineated
alternative choices. In other words, the offer must be structured
to present an unambiguous choice between the alternative sets
of terms. Under general contract principles, a proposal that sets
out an extensive menu of terms among which an offeree may
pick and choose, or that requires an offeree to supply a term not
specified in the offer may provide the basis for an enforceable
contract if the terms are made definite through an acceptance.
(See, e.g., Keller v. Ybarru (1853) 3 Cal. 147; Hylton Flour Mills
v. Bowen (1933) 128 Cal.App. 711, 714.) “In such cases the offer
does not fail for indefiniteness, but no contract is made by an
attempted acceptance which does not supply the term as
indicated. [Citation.] The offer assents in advance to the term
chosen or filled in by the offeree.” (Rest.2d Contracts, § 30(1),
com. c, p. 85; see also, 1 Williston on Contracts, supra, § 4:22,
pp. 532–539.) This general approach permits parties to continue
to negotiate until they have arrived at an ultimate, and
mutually acceptable, resolution. The section 998 context is
12
Indeed, the Court of Appeal adequately demonstrated the
feasibility of this approach when, after holding “simultaneous
offers” are categorically invalid under section 998 (Gorobets,
supra, 105 Cal.App.5th at p. 928, fn. 9; see id. at pp. 927–928),
the court individually analyzed the alternatives, concluding the
lump sum alternative was sufficiently certain while the more
complex dispute resolution alternative was not (id. at pp. 931,
934).
19
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
somewhat different, however, because it involves a specific kind
of offer.
A valid 998 offer must be definite and specific before it
may meet the statutory requirements for cost shifting. A 998
offer may very well fail for cost-shifting purposes due to its lack
of specificity from the trial court’s perspective. A court that later
considers whether a rejected offer was exceeded must be able to
identify precisely what terms were rejected, not left to
contemplate how an offer might have ultimately been construed,
depending on an offeree’s theoretical choice among an array of
available possibilities. In relying on a rejected or lapsed 998
offer to justify cost shifting, the court looks to whether a
definitive and enforceable offer was made, by whom, when, and
whether a rejecting party later failed to secure a more favorable
outcome. It is the offeror’s burden to demonstrate the validity
of the offer under section 998. An offer may be held sufficiently
certain if it clearly delineates the specific terms attributable to
each choice; the proposed choices are mutually exclusive, so that
only one choice can be selected; and the offer clearly
communicates how the offeree’s acceptance is to be conveyed.
If structural validity of the offer as a whole is established,
the court will then separately consider whether each alternative
presented is sufficiently certain to permit a fair valuation at the
time the offer was made. If the court can place a fair value on
at least one of the proposed alternatives, and a rejecting offeree
secures a judgment or award that exceeds the highest valued,
valid alternative, section 998 does not permit cost shifting, and
the general rule under section 1032 applies. If, on the other
hand, the value of the secured judgment or award does not
exceed the one valid alternative with the highest value, the cost-
20
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
shifting penalty is permitted in favor of the offeror whose offer
was rejected and not ultimately exceeded. It matters little if the
offeree also rejected a set of valid settlement terms of lower
value. In the end, the offeree had the opportunity to settle the
case under a higher value set of terms that were sufficiently
certain, thus valid. An offeree who rejects that valid set of terms
and elects to continue with litigation has placed itself in
precisely the situation section 998 was designed to
disincentivize. Requiring the offeree to obtain a better result
than the highest value set of valid terms is most consistent with
the text and purpose of the statute.
2. Alternative-choice Offers Do Not Undermine or
Defeat the Purpose of Section 998
Plaintiff’s additional arguments assert that permitting an
alternative-choice offer defeats section 998’s intended purposes.
Those additional arguments fail. Permitting alternative-choice
offers is consistent with the underlying policy permitting cost
shifting. Doing so increases the likelihood of an early settlement
by providing the parties with the flexibility to explore multiple
avenues toward resolution at once, rather than forcing them into
a more time-consuming process that requires them to make and
evaluate offers one at a time. In this regard, our oft-cited
maxim, “[t]he more offers that are made, the more likely the
chance for settlement” (T. M. Cobb Co., supra, 36 Cal.3d at p.
281), can be augmented by recognizing that the more offers that
are made early, the more likely the chance for settlement early,
which in turn will diminish the economic waste associated with
needlessly prolonged litigation. (See Martinez, supra, 56
Cal.4th at p. 1019.)
21
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
Additionally, the ability to place clear alternatives on the
table affords the parties “the flexibility to fashion settlements
on terms best suited to the circumstances of a particular action.”
(Berg, supra, 120 Cal.App.4th at p. 732.) In Song-Beverly Act
cases, for instance, permitting manufacturers to offer mutually
exclusive settlement alternatives is consistent with that Act’s
remedy structure, which allows consumers to elect between
restitution or replacement of their defective vehicle. (Civ. Code,
§ 1793.2, subd. (d)(2).) This is not to say, however, that the
validity of an alternative-choice 998 offer depends on the remedy
structure of the relevant underlying statute. Regardless of the
nature of the claims asserted, parties may often wish to craft
their settlements based on the unique set of circumstances and
limitations they face. Alternative-choice offers allow the parties
to communicate and explore those preferences more rapidly and
efficiently, potentially shortening the path to common ground.
Touching on another voiced concern, all 998 offers remain
revocable before acceptance or expiration. So authorizing
alternative-choice offers will not undermine the goal of properly
compensating injured parties. Parties will still be able to change
course as necessary if they “discover new evidence bearing on
the plaintiff’s injuries or the defendant’s culpability.” (Martinez,
supra, 56 Cal.4th at p. 1021.)
Plaintiff urges that flexibility is beneficial, but it cannot
be embraced “to the detriment of clarity and finality.” He seeks
support for his position in Madrigal where we stated that
“section 998 is specifically designed to limit parties’ flexibility
and to encourage certain conduct: the making and acceptance of
reasonable settlement offers with an eye toward reducing
costs. . . . This limitation on flexibility is a feature of the
scheme, not a bug.” (Madrigal, supra, 17 Cal.5th at p. 610.) The
22
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
purported trade-off between flexibility and clarity that plaintiff
describes is not implicated here. As noted, offers containing
settlement alternatives are valid for cost-shifting purposes only
if the offeror can establish sufficient certainty in two ways:
(1) the offer is clearly structured to present a specific choice
between mutually exclusive and clearly defined sets of
settlement terms; and (2) at least one set of terms is capable of
valuation at the time of the offer. (See pp. 15–16, ante.) Thus,
the additional flexibility afforded by a well-drafted alternative-
choice offer does not necessarily come at the expense of clarity.
An offeror who does not present a clear offer risks a later finding
that the offer presented was invalid. The statement plaintiff
cites from Madrigal does not conflict with this conclusion.
Madrigal was focused on an entirely different type of limitation
on settlement flexibility. Plaintiff there had asked the court to
construe section 998 to permit the cost-shifting penalty only if
the case ends after trial. (Madrigal, at pp. 609–610.) We
rejected such a reading because “[s]ection 998 purposely places
on the party who rejects a reasonable offer the risk that changed
circumstances might lead to a worse result.” (Id. at p. 610.) The
proposed holding here does not undermine this principle but
strengthens it. If an alternative-choice 998 offer is properly
structured to present a clear choice and at least one alternative
is capable of valuation, the offeree continues to bear the risk
incurred by rejecting it.
Echoing concerns raised by the Court of Appeal (see
Gorobets, supra, 105 Cal.App.5th at p. 929), plaintiff further
posits that authorizing alternative-choice 998 offers will
increase gamesmanship by offerors who will seek to inundate
offerees in a sea of alternatives, forcing them within 30 days to
examine the value of each choice, the anticipated value of their
23
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
claims, and the likelihood that a court might determine one or
more of the choices is valid for cost-shifting purposes.13 At the
outset, it should be noted that a baffling “sea of alternatives”
scenario bears no resemblance to the facts here. Plaintiff was
given only two choices to consider: a simple lump-sum amount
13
Plaintiff also contends this result would be at odds with
the Legislature’s intent when it replaced former section 997
with section 998. Former section 997 had allowed either nine or
10 days for consideration of statutory offers of compromise.
(Stats. 1969, ch. 570, § 1, pp. 1200–1201.) In support of this
argument, plaintiff requested that the court take judicial notice
of numerous documents related to the passage of section 998 in
1969 as well as materials related to legislative amendments to
the statute in 1969 and 1971. In his briefing, plaintiff cites only
five documents from among those materials. We deny his
request for judicial notice of materials not cited in his brief “on
the ground plaintiffs failed to explain their relevance to the
dispositive issues on appeal.” (Madrigal, supra, 17 Cal.5th at p.
609, fn. 10.) Among the cited materials are postpassage letters
from the bills’ authors to the Governor explaining the author’s
personal views as to the meaning and purpose of the legislation.
We deny the request for judicial notice of these materials
because the “views of individual legislators as to the meaning of
a statute rarely, if ever, are relevant . . . .” (Quelimane Co. v.
Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 45–46, fn. 9;
see also Myers v. Philip Morris Companies, Inc. (2002) 28
Cal.4th 828, 845.) Lastly, as to the two remaining documents
cited by plaintiff in his briefing regarding Assembly Bill No.
1756 of 1969, we reiterate the guidance that we provided in
Madrigal: “[A] court will take judicial notice of the legislative
history of a statute to ascertain the statute’s purpose and
meaning if the statute is ambiguous. [Citation.] But a ‘request
for judicial notice of published material is unnecessary. Citation
to the material is sufficient.’ [Citation.] As we did
in Quelimane, we treat ‘the request for judicial notice as a
citation to those materials that are published.’ ” (Madrigal, at p.
609, fn. 10.)
24
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
or a more involved dispute-resolution alternative. At no point
did the plaintiff seek additional time to consider the 998 offer or
object that the choice of terms was too complex to consider
within the statutory period. Indeed, the time records filed in
support of plaintiff’s attorney fees motion recorded only 0.2
hours billed by his counsel to review and analyze defendant’s
alternative-choice 998 offer during the 30-day window. There is
no indication plaintiff was unreasonably pressed for time or
bamboozled by a morass of alternatives.14
In addition, our lower courts have already developed
safeguards to police a situation in which an offeror attempts to
deluge an offeree with an array of choices that cannot
reasonably be evaluated and considered within the statutory
period. A party who makes confusing offers attempting to
overwhelm an opponent, or in an effort at gamesmanship, rather
than genuinely attempting to reach a settlement, risks that its
“offer” will be found to have been put forward in bad faith. (See
p. 15, fn. 11, ante.) Also, whenever offerees face a situation in
which they lack the ability to reasonably assess a 998 offer
within the statutory period, they are free to request an extension
14
It is, of course, conceivable that an offer presenting the
offeree with more than two discrete sets of choices for acceptance
could satisfy section 998 and bring the cost-shifting penalty into
play. Such a scenario is not presented here and we express no
opinion on the validity of such an offer in the abstract. However,
we reemphasize that any set of settlement terms in an
alternative-choice 998 offer that party seeks to enforce must be
valid, meaning the offer as a whole must pass the structural
certainty requirements set forth here and the alternative itself
must be independently capable of an accurate valuation, both by
the offeree at the time it was made and by the trial court in
hindsight.
25
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
of time and/or informal discovery from the offeror in order to
obtain needed information, and any refusal on the part of the
offeror may have “viewed as potent evidence that [the] offer was
neither reasonable nor made in good faith.” (Barba v. Perez
(2008) 166 Cal.App.4th 444, 451; see also Lewis v. Ukran (2019)
36 Cal.App.5th 886, 897–898; Whatley-Miller v. Cooper (2013)
212 Cal.App.4th 1103, 1114.)
Plaintiff also contends that alternative-choice 998 offers
will inhibit settlements by placing offerees in a “Catch-22”
because they still might face section 998 penalties regardless of
whether they accept one choice of terms or reject them all.
Plaintiff again turns to Madrigal for support. Madrigal held
that a plaintiff who rejects a 998 offer or allows it to expire, but
later, before trial, agrees to settle for an amount less favorable
than the 998 offer, does not necessarily avoid cost shifting under
the statute. (Madrigal, supra, 17 Cal.5th at p. 599.) As we
observed, “the terms of section 998[, subd. ](a) are clear and
mandatory. Costs generally allowable under section 1032 ‘shall
be withheld or augmented’ as the statute provides. (§ 998[,
subd. ](a).) This straightforward directive requires that the
court adjust generally recoverable costs if section 998’s
conditions are met. Nowhere does section 998[, subd. ](a)
require that the case be resolved by trial before it comes into
play. Nor does it exclude from its reach cases resolved by a
postrejection, but pretrial, settlement.” (Id. at p. 604.) The
parties agreeing to such a pretrial resolution are free to address
the payment of costs in the terms of their settlement. “[I]f [the]
settling parties do not resolve the allocation of costs, section
1032 authorizes the [trial] court to determine and award them”
as modified by the application of the cost-shifting mechanism
under section 998, subdivision (a). (Madrigal, at p. 606.)
26
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
According to plaintiff, if we authorize alternative-choice 998
offers, Madrigal opens the door to the possibility of cost shifting
whenever an offeree accepts one set of terms because the offeror
might later argue the offeree failed to obtain a more favorable
result than the value of one or more of the “rejected” sets of
terms. Plaintiff’s argument, however, is fundamentally
undermined by our holding that Jaguar’s proposal was a single
alternative-choice offer, not two simultaneous offers that both
could be accepted.
To reiterate, the alternative-choice offer at issue is best
understood under general contract principles as an invitation to
the offeree to enter into a contract under one of two equally
acceptable sets of terms presented by the offeror. If either of the
alternatives is acceptable, the offeree may, under the express
terms of the offer, convey its assent either in a writing of its own,
or by choosing the set of terms it selects and signing the offer.
When a clear choice proposed by the offeror is accepted, a
contract to settle is formed based solely on the terms accepted.
If none of the alternatives are acceptable to the offeree, or the
offeree allows the offer to expire, the offer as a whole is rejected.
This understanding of a binary choice between accepting
or rejecting a single offer not only aligns with general contract
law but is also consistent with the structure and operation of the
statute itself. Section 998, subdivision (b)(1) directs that if “the
offer is accepted,” the court is to enter judgment in accordance
with the accepted terms. (Italics added.) Conversely,
subdivisions (c)(1) and (d) trigger cost-shifting penalties when
“an offer made” is “not accepted” and “a more favorable
judgment or award” is not later achieved by the rejecting offeree.
The purpose of section 998 is best ensured by a clear structure
27
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
in which a qualifying offer is either accepted, rejected, or
withdrawn. Plaintiff’s premise that alternative-choice 998
offers can be both accepted and rejected would upend this clear
statutory structure and lead to absurd results, in which the
underlying litigation is purportedly ended by “settlement,” but
the parties can continue to argue over costs. The whole goal of
the statutory structure is to end disputes, not prolong them.15
Plaintiff next urges that permitting alternative-choice
offers will result in a waste of judicial resources because trial
courts will be forced to assess the validity and value of every
alternative presented and compare each one to the value of the
judgment or award ultimately secured. His concerns are
overstated. It has long been established that multiple offers
made ad seriatim are permitted and may require trial court
review to determine the bounds of cost shifting. (See Martinez,
supra, 56 Cal.4th at p. 1023.) Asking trial courts to review
alternative-choice offers should not pose meaningfully different
15
Even if we were to accept plaintiff’s argument that
Madrigal creates this potential Catch-22 nightmare scenario
when applied to alternative-choice 998 offers, he would not have
been subjected to such a predicament here if he had accepted
either one of the alternatives. Under either set of terms,
defendant was willing to agree to waive its costs and either pay
$7,500 for plaintiff’ attorney fees and costs or, at plaintiff’s
election, have a reasonable amount for fees and costs to be
determined by the court pursuant to the Act with the stipulation
that plaintiff would be the prevailing party. (See Civ. Code
§ 1794, subd. (d).) As we underscored in Madrigal, if the parties
agree to a particular allocation of costs as part of their
settlement agreement, the court is not authorized to determine
and award them differently from the contractual terms to which
they agreed to be bound. (Madrigal, supra, 17 Cal.5th at
pp. 605–606.)
28
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
issues in this regard. Furthermore, under our holding, cost-
shifting penalties can only be triggered by a 998 offer in which
(1) the rejected or lapsed offer clearly presents a choice between
two distinct sets of terms, either of which the offeree may accept
as a settlement; (2) at least one set of alternative terms is
sufficiently certain to be fairly valued; and (3) the offeree fails to
obtain a judgment or award that exceeds the value of a valid
alternative. Once it finds that those requirements are
established, the trial court’s task is concluded. There is no need
for the court to evaluate the validity or value of any other
alternative contained in the offer. Here, for example, the trial
court’s job could not have been more straightforward in light of
the $85,000 lump sum alternative. It could readily assess the
value of that alternative and compare it with the judgment
obtained.
Plaintiff claims authorization of alternative-choice offers
will compound the work of trial courts in other ways because it
will incentivize “opportunistic litigants” to “jam as many
complex settlement options” into the offer as possible in the hope
that at least one might be valid. Then, according to plaintiff, if
one of those complex alternatives is accepted, courts are more
likely to be pulled into postjudgment disputes over the meaning
of the parties’ settlement terms, leading to further litigation.
That scenario is not presented here. The question in this case
is whether a rejected alternative-choice offer can ever be
sufficiently certain to trigger cost-shifting penalties.
Furthermore, concerns as to postjudgment enforcement of
complex settlement agreements are not unique to the section
998 context. If the terms of a judgment based on an accepted
998 offer are later disputed, a court would resolve that dispute
just as it would go about interpreting the terms of any other
29
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
contract. (See Fassberg, supra, 152 Cal.App.4th at p. 764.) If,
as the drafter of the proposal, the offeror presents an unclear
offer, any ambiguity would ordinarily be construed against him.
(Ignacio v. Caracciolo (2016) 2 Cal.App.5th 81, 86.) Such a
possibility provides an incentive for a section 998 offeror to take
care in presenting a clear offer, promoting the goals of the
statutory scheme.16
To summarize, we hold that a statutory offer of
compromise presenting an offeree with a choice between two
alternative sets of terms is not categorically barred by section
998. When asked to determine the validity of an alternative-
choice 998 offer on a motion for cost shifting, the trial court first
determines whether the offer is structured to make the provided
sets of terms clear and the manner of selection between them
16
Plaintiff requests that the court take judicial notice of the
Orange County Superior Court’s register of actions in Kirzhner
v. Mercedes Benz USA, LLC (Super. Ct. Orange County, 2020,
No. 30-2014-00744604-CU-BC-CJCM). Plaintiff asserts the
register of actions is a proper subject of judicial notice as an
official court record (Evid. Code, § 452, subd (d)), and it is
relevant because it “exemplifies the additional litigation created
by accepting a complex settlement offer — i.e., the type of offer
inherent in a simultaneous offer.” For its part, defendant
requests that we judicially notice several trial court records in
Assatourian v. Hyundai Motor America (Super Ct. L.A. County,
2024, No. 19STCV32842) and Hale v. Hyundai Motor America
(Super. Ct. Orange County, 2023, No. 30-2020-01129492) on the
grounds that it provides relevant “examples of multiple-option
998 offers have been accepted in Song-Beverly actions.” We
deny both requests because the material identified is not
relevant to the issues presented on appeal. The mere existence
of litigation in assertedly similar cases, or the entry of
settlement judgments in other cases, does not assist in resolving
the questions addressed here.
30
GOROBETS v. JAGUAR LAND ROVER NORTH AMERICA, LLC
Opinion of the Court by Corrigan, J.
evident. In this regard, the 998 offer must delineate the specific
terms attributable to each choice presented and provide that the
offeree must affirmatively choose one or the other set of terms
by way of acceptance. Once it determines that the alternative-
choice 998 offer is sufficiently clear in structure, the trial court
then considers whether either set of terms is sufficiently certain
to permit valuation at the time the offer was made and whether
that value of at least one valid alternative is higher than
judgment or award ultimately achieved. The rebuffed offeror
seeking cost shifting bears the burden of showing its 998 offer
was valid, meaning it was sufficiently certain.
III. DISPOSITION
We affirm that portion of the judgment affirming the trial
court’s award. We reject and overturn its holding that section
998 categorically prohibits alternative-choice offers. The parties
shall bear their own costs on appeal.
CORRIGAN, J.
We Concur:
GUERRERO, C. J.
LIU, J.
KRUGER, J.
GROBAN, J.
EVANS, J.
FEUER, J.*
*
Associate Justice of the Court of Appeal, Second Appellate
District, Division Seven, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
31
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.
Name of Opinion Gorobets v. Jaguar Land Rover North America,
LLC
__________________________________________________________
Procedural Posture (see XX below)
Original Appeal
Original Proceeding
Review Granted (published) XX 105 Cal.App.5th 913
Review Granted (unpublished)
Rehearing Granted
__________________________________________________________
Opinion No. S287946
Date Filed: August 6, 2026
__________________________________________________________
Court: Superior
County: Los Angeles
Judge: Monica Bachner
__________________________________________________________
Counsel:
Greines, Martin, Stein & Richland, Cynthia E. Tobisman, Alana H.
Rotter, Joseph V. Bui, Laura G. Lim; Knight Law Group, Radomir R.
Kirnos; Wirtz Law and Richard M. Wirtz for Plaintiff and Appellant.
Bowman and Brooke, Brian Takahashi, Bryan A. Reynolds, Richard L.
Stuhlbarg; Nelson Mullins Riley & Scarborough, Jennifer T. Persky
and Robert L. Wise for Defendant and Respondent.
Counsel who argued in Supreme Court (not intended for
publication with opinion):
Cynthia E. Tobisman
Greines Martin, Stein & Richland LLP
6420 Wilshire Boulevard, Suite 1100
Los Angeles, CA 90048
(310) 859-7811
Robert L. Wise
Nelson Mullins Riley & Scarborough LLP
1021 East Cary Street, Suite 2120
Richmond, VA 23219
(804) 533-2900