Tuesday, November 14, 2017
Court of Appeal:
LAUSD’s Offer of Compromise Overly Broad, Invalid
Ashmann-Gerst Says Prevailing Defendant Not Entitled to Expert Witness Fees Because §998 Proposal for Settlement Went Beyond Issues in Present Litigation
By a MetNews Staff Writer
The Court of Appeal for this district has held that the Los Angeles Unified School District cannot garner $30,000 in expert witness fees in a case in which it was sued, and won, because its offer of compromise, pursuant to Code of Civil Procedure §998, was conditioned on the plaintiff signing a release, the content of which was not disclosed, and waiving all causes of action, known or unknown.
The opinion by Justice Judith Ashmann-Gerst of Div. Two was filed Thursday and was not certified for publication. It reverses an order by Los Angeles Superior Court Judge Gregory Alarcon denying a motion to tax costs, while leaving intact the underlying judgment for Los Angeles Unified School District (“LAUSD”).
The action was brought on behalf of a special needs student who, at the age of 3, was allegedly sexually assaulted by a bus driver. LAUSD made a purported §998 offer to settle for $50,000.
Sec. 998 provides, in part:
“If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer. In addition,...the court or arbitrator, 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 postoffer costs of the services of expert witnesses,...”
There were conditions attached to the LAUSD’s offer. They were that “plaintiff’s counsel will execute and deliver to counsel for defendant, a Request for Dismissal of the entire action, with prejudice”; that both parties would “bear their own attorney fees and costs”; and “Plaintiff and her counsel will deliver to counsel for defendant a Full and Final Release of all Claims, which Release will include a waiver of Civil Code section 1542.”
Sec. 1542 sets forth:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
Permissible Scope Limited
Ashmann-Gerst said that “[i]t is well established that to be valid a section 998 offer” may not go beyond settlement of claims in the case at hand. She wrote:
“We agree with appellant that LAUSD’s section 998 offer to compromise was invalid.
“Foremost, the offer was invalid because it required appellant to sign a release when the terms of the release were undisclosed and uncertain. LAUSD’s offer stated that appellant would execute and deliver ‘a Full and Final Release of all Claims, which Release will include a waiver of Civil Code section 1542.’ The terms ‘Full,’ ‘Final,’ ‘Release’ or ‘all Claims’ were not defined. Nor was any ‘Release’ attached to the offer. Thus, appellant was being asked to blindly agree to terms in a separate document that she had never seen. Appellant was not required to do so.”
Release Provision Unclear
The jurist went to comment, with respect to the proviso that a release be executed:
“The terms of the offer itself did not make clear who would prepare the release or what terms the release would include. There was no indication of who specifically was to be released or what specific claims would be released. Appellant was not required to guess what she would be signing.”
Ashmann-Gerst said it is established that a release of unknown claims does not invalidate a §998 offer provided the release is limited to claims arising from the matters in dispute in the present litigation. She declined to construe the LAUSD’s offer as impliedly being so limited, querying, rhetorically:
“If LAUSD’s offer was limited only to the causes of action actually filed in the trial court, why the requirement for a Civil Code section 1542 waiver?
“No language in this statute limits unknown claims only to those arising from the lawsuit at issue.”
The full amount of the costs claimed was $118,271.74, including the $30,301.64 in expert witness fees disallowed by Ashmann-Gerst’s opinion.
Reversal of the judgment was sought on the ground, among others, that the jury was prejudiced by references to a decision not to prosecute the bus driver criminally. Reviewing the record, Ashmann-Gerst said:
“[T]he jury instructions, the testimony of witnesses and the statements in closing argument defused any potential prejudice.”
The case is K.F. v. Los Angeles Unified School District, B276410.
Attorneys on appeal were Arash Homampour and Wendi O. Wagner of the Homampour Law Firm for the minor, Stephen Acker and Leslie Anne Burnet of Acker & Whipple for Los Angeles Unified School District, and Raul L. Martinez and Esther P. Holm of Lewis Brisbois Bisgaard & Smith for First Student, Inc., LAUSD’s contractor by which the driver, Robert Allen Brown, was employed.
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