Metropolitan News-Enterprise


Friday, August 29, 2008


Page 1


Plaintiffs May Serve Settlement Offer With Summons—C.A.


By STEVEN M. ELLIS, Staff Writer


A defendant who received an offer to settle a lawsuit at the same moment he was served with the summons and complaint had a sufficient basis to determine whether the offer was reasonable, a split panel of Third District Court of Appeal ruled yesterday.

Writing in a partially published opinion that the plaintiff was not playing “hide the ball” when he served a summons, complaint and a $100,000 settlement offer on a defendant eight months after informing him of damages incurred from a falling refrigerator, Justice M. Kathleen Butz, joined by Justice Ronald B. Robie, declined to impose a judicial “waiting period” for serving settlement offers onto the statutory procedure shifting costs if a party fails to accept a reasonable offer.

However, Justice Rick Sims dissented that such an offer could only be reasonably evaluated “after basic discovery procedures (requiring responses under oath) have been used,” and accused the majority of adding “another wicked slider to a plaintiff’s arsenal of hardball tactics.”

Broken Ankle

Antonio Barba sued Lupe Perez in 2005, eight months after Barba’s ankle was broken when a refrigerator he was helping to move in a rental housing unit above a club owned by Perez fell and landed on Barba’s foot. Barba and his wife had been visiting Perez’s wife, Leticia Perez, who managed her 82-year-old husband’s business—including the rental housing unit and the club—due to his infirmities.

Leticia Perez had asked Barba and Juan Mendoza—a musician at the club and an occasional aide to Leticia Perez—to help move out an old refrigerator, but the pair lost control of the refrigerator while moving it down the stairs on a dolly, and it landed on Barba’s foot when he was unable to jump from its path in time.

Barba requested reimbursement from the Perezes for the $70,000 in medical expenses he incurred, and for time he lost from work, but received no response, so he filed suit and included an offer to settle for $99,999.99 under Code of Civil Procedure Sec. 998 with the summons and complaint.

Statutory Procedure

The statute establishes a procedure to shift costs if a party fails to accept a reasonable settlement offer presented no less than 10 days before trial, and provides that a defendant who fails to accept a written offer to compromise by a plaintiff within 30 days, and who fails to obtain a more favorable judgment, must pay costs the plaintiff incurs after making the offer, and may be ordered to pay expert witness fees.

Perez filed an answer four weeks later, but did not address the settlement offer.

At trial, the jury concluded that Mendoza’s negligence was a substantial factor and that he had been acting as the Perezes’ agent. Finding Barba bore no responsibility for the accident, the jury awarded him $117,000, including $75,000 in medical expenses and $42,000 in loss of income.

Barba then sought costs, noting that the award was greater than his settlement offer, but Perez moved to tax costs, arguing that he “had absolutely no basis to determine if the offer was reasonable” when he received it. However, San Joaquin Superior Court Judge Lauren P. Thomasson denied Perez’s motion, and the Court of Appeal affirmed.

Previous Information

Noting that Barba and Perez had a “close, semi-familial relationship” with a “free flow of information between them,” and pointing to the information Barba had provided Perez prior to initiating the suit and serving the settlement offer, Butz concluded that the statute did not impose any minimum period of time that must elapse following commencement of suit for service of a valid offer to compromise.

She also commented that adopting a “waiting period,” such as that advocated by Robie, would discourage Sec. 998’s purpose of encouraging pretrial settlements and avoiding needless litigation.

“This is exactly the way Sec. 998 was designed to operate: to encourage the parties to consider the option of settlement seriously, before significant fees are incurred and they become entrenched in their positions,” she wrote.

However, Robie, pointing to the “litigation frenzy” that he said would result from his colleagues’ opinion, asked “Why on earth would we want to do this?”

He explained:

“While it is technically true that a defendant can notice the deposition of the plaintiff as soon as the defendant is served with the summons and complaint…, I do not think it is a good idea to force defendants to jam basic discovery into the 30 days following service of the summons and complaint in order to respond to a 998 offer.

The case is Barba v. Perez, 08 S.O.S. 5260.


Copyright 2008, Metropolitan News Company