Friday, January 4, 2019
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Court of Appeal:
CCP §998 Offer at Opening of Lawsuit Was Ineffective
By a MetNews Staff Writer
A judge did not abuse his discretion is disallowing pre-judgment interest to a plaintiff whose spurned statutory offer to compromise was for a lower amount than the ultimate judgment where the offer was made close to the start of litigation, the defendant did not have sufficient information to evaluate the reasonableness of the offer, and the defendant communicates that inability to the offeror, the Court of Appeal for this district held yesterday.
The opinion by Justice Brian Hoffstadt affirms an order by Los Angeles Superior Court Judge David S. Cunningham denying $2,335,929.20 in prejudgment interest--from the June 11, 2013, the date of an offer pursuant to Code of Civil Procedure §998, to the time of the Aug. 4, 2017 judgment--to plaintiff Dionne Licudine. She was injured through a doctor’s negligence during gallbladder removal surgery.
Her offer to defendant Cedars-Sinai Medical Center was to settle for “$249,999.99, plus legal costs.” The judgment was for $5,594,557.
Normally, where a judgment is for a greater amount than the §998 offer, prejudgment interest is allowed. However, Hoffstadt pointed out, the offer “is valid only if, among other things, the offeror knew that the offeree had reasonable access to the facts necessary to ‘intelligently evaluate the offer.’ ”
Three Factors
He continued:
“What factors are relevant in deciding whether the offeree had enough facts to evaluate the offer? Although courts should evaluate the totality of the facts…, we conclude that three factors are especially pertinent: (1) how far into the litigation the 998 offer was made; (2) the information available to the offeree prior to the 998 offer’s expiration; and (3) whether the offeree let the offeror know it lacked sufficient information to evaluate the offer, and how the offeror responded. Applying these factors in this case, we conclude that the trial court did not abuse its discretion in finding that the plaintiff’s 998 offer was not made in good faith.”
Hoffstadt pointed out that Licudine made her offer not at all far into the litigation--only 19 days after serving Cedars with her three-page complaint and five days after it answered.
Insufficient Information
He said that as Cunningham “properly recognized,” whether the offer “was made in good faith turns entirely…on whether Cedars had sufficient information to assess whether plaintiff’s $249,999.99 offer was a reasonable one.” The jurist noted:
“As to the availability of information, Cedars had very little information available to it on the issues of liability and the amount of damages prior to the date plaintiff’s 998 offer expired. Plaintiff’s three-page complaint was ‘bare bones,’ as it listed no specifics as to the injuries she suffered or the amount of damages she sought.”
Licudine’s responses to discovery requests, he said, came just one day before expiration of the 30-day period within which the offer was open, and were not expansive.
Cedars did let know Licudine that it lacked the necessary information to respond, Hoffstadt recited, pointing to a written “objection” to the offer in which it said it was “too soon for it to make any determination” as to the reasonableness of the offer because it had “not had an opportunity to fully investigate this action.” The plaintiff, he added, did not respond.
The case is Licudine v. Cedars-Sinai Medical Center, B286350.
Mid-Wilshire attorney Howard A. Kapp represented Licudine, Cedar’s attorneys on appeal were S. Thomas Todd, and Emily V. Cuatto of the Burbank firm of Horvitz & Levy LLP.
Planned Law Career
Licudine was, at the time of her 2012 surgery, a 22-year-old senior at USC; She was captain of the women’s rowing and a candidate for the 2012 Olympics in London. She had been admitted to law schools but claimed that in light of the pain she suffers, she was unable to undertake such studies.
At the first trial in the case, a jury awarded $1,045,000, and both sides moved for a new trial on damages. Los Angeles Superior Court Judge Charles F. Palmer granted both motions and Licudine appealed.
In a Sept. 29, 2016 opinion, Hoffstadt wrote:
“Today, we hold that the jury must fix a plaintiff’s future earning capacity based on what it is ‘reasonably probable’ she could have earned. Because the plaintiff in this case did not adduce any evidence to establish that it was “reasonably probable” she could have obtained employment as an attorney or any evidence on the earnings of lawyers, the trial court did not abuse its discretion in determining that the jury’s $730,000 award for lost earning capacity was not supported by substantial evidence. What is more, given the unusual facts of this case, the court acted within its discretion in granting a new trial on damages rather than entering a judgment notwithstanding the verdict for the defendants.”
At the second trial, the jury awarded $7,619,457, but Cunningham trimmed the judgment to $5,594,557 in light of the $250,000 lid on noneconomic damages mandated by the Medical Injury Compensation Reform Act of 1975.
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