Low, Ball & Lynch’s

WEEKLY LAW RESUME

July 29, 2004 Issue      By: Raymond Coates

Civil Procedure - Offers to Compromise

Erika A. Berg v. Ronald L. Darden, D.D.S.

Court of Appeal, Second District

(June 13, 2026)

California procedure provides for the service of an offer to compromise prior to trial, which allows the defendant to recover costs and expert expenses if a more favorable judgment is obtained than the offer.  This case addresses the issue of the form of the offer.

This personal injury action against Erika Berg's former dentist centered around a letter sent by Ms. Berg's attorney to the attorney for Dr. Darden.  After discussing discovery-related issues and merits of the litigation, the letter stated it was making a section 998 offer to settle for $225,000.  The letter was faxed and received by Dr. Darden's attorney.  No response was made to the letter.  A jury returned a verdict of $524,000.

In post-trial motions to recover expert witness expenses, litigation costs and prejudgment interest, the trial court denied the motion, holding the offer ineffective.

The Court of Appeal reversed.  The Court noted that Code of Civil Procedure section 998 provides that any party may make an offer in writing to the other side to allow judgment to be taken in accordance with terms and conditions stated.  The section goes on to provide how the offer is to be accepted and the consequences of rejection.  Such offers must be specific and clear and in writing.

In this case, Darden argued that the letter was not sufficiently clear to serve as a 998 offer.  The Court noted it could have been in a more formal document, such as a pleading, but this was not required.  As long as the offer was sufficiently precise to allow a judgment to be taken, it was sufficiently clear.  Here, it was clear that the offer made, if accepted, was to result in entry of a judgment.  Thus, it was a valid 998 offer.  The Court felt that endorsing this letter as a valid 998 offer promoted the public policy of encouraging settlement of litigation.  The Court stated the offer did not need to contain any "magic language."  As long as it was clear, in writing, made under section 998 and, if accepted, would result in the entry of a judgment, it met the requirements of the section.

The Court also found the offer to have been properly served.  The attorney for Darden admitted to receiving the letter by mail.  A formal proof of services was not required.  The letter was dated and had a place of mailing.  It was addressed to Darden's attorney at his business address.  It was possible to calculate the date on which service was effected so as to calculate the running of the offer.  The Court thus felt effective service had been accomplished.

The Court reversed the order denying the motion to recover costs and remanded the matter to the trial court for hearing on the merits as to whether the offer was reasonable and made in good faith.

COMMENT

This opinion shows that as long as the basic requirements of section 998 are met, an offer is effective.  It may include offers made by letter.

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