Failure to Word Statutory Settlement Offer Properly Costs Defendants in California Motorcycle Accident Case

Motorcycle AccidentSettlement offers are part of many personal injury cases. Weighing whether to accept or reject an offer can be complicated, especially when you receive a statutory settlement offer in your California injury lawsuit. Rejecting such an offer and then obtaining a judgment that is less than the offered settlement amount could mean that you’re on the hook for paying some of the other side’s court costs. One injured Northern California motorcyclist escaped such a fate, even though the judgment he received was less than the amount offered, since the California Court of Appeal decided that the terms of the other side’s offer did not comply with the law’s requirements.

This case began with an auto accident in Alameda County. Seventeen-year-old Jacy Rasnick was driving her father’s car when she ran a stop sign and struck a motorcycle driven by Charles Sanford. Sanford sued the driver and her father for his injuries. The Rasnicks, through their lawyer, extended a statutory “998 offer” in the amount of $130,000. The Rasnicks conditioned this offer on Sanford’s entering into a settlement agreement and general release with them.

A 998 offer is so named because it was created by Section 998 of the California Code of Civil Procedure. The statute’s goal is to encourage the settlement of civil lawsuits. To that end, a 998 offer extended by a defendant in a personal injury case creates a need for careful analysis by the injured person. That’s because, if a plaintiff in a personal injury case rejects a 998 offer, goes to to trial, and recovers an amount less than the offered settlement, even though the injured person was “victorious” at trial, he cannot recover any of his court costs that were incurred after the date that the offer was made. What’s more, even though the defendant in such a situation was judged to be liable, he may be able to recover the costs he racked up after the date of the offer.

In Sanford’s case, he rejected the Rasnicks’ 998 offer and went to trial. At the trial’s conclusion, the jury assessed Sanford’s damages at $143,000. The jury found Rasnick 80% responsible and Sanford 20% responsible, which left the net award to Sanford at $115,000. Adding in costs that Sanford was entitled to recover, the total sum ended up at $122,000. With Sanford’s total award less than $130,000, the Rasnicks sought, and the trial court ordered, payment of their post-offer costs by the injured motorcyclist. Sanford appealed this decision, arguing that the 998 offer the Rasnicks extended was not valid, which in turn meant that the trial court erred in awarding the Rasnicks their post-offer costs.

The appeals court agreed with Sanford. The key problem with the 998 offer that the Rasnicks made to Sanford was the settlement agreement and general release demand. The law allows parties to demand releases as part of their 998 offers, but, as the appeals court in this case noted, there was no case law “holding that a valid 998 offer can include a settlement agreement.” This was especially true because the 998 offer that the Rasnicks made did not describe or explain the parameters of this settlement agreement in any way.

The Rasnicks argued that the phrasing of their 998 offer was routine and commonplace in the auto insurance defense world. That agreement did not persuade the appeals court at all. “Maybe it is common. Or standard. Maybe not. That does not make it valid,” the court succinctly wrote in casting the argument aside.

Auto accident lawsuits in California, even if the facts are simple, may not be simple court cases. Even if the scenario is a straightforward “failure to yield at a stop sign” crash, there are still many elements of the law, including navigating all of the rules of court procedure, that you have to take into account if you want to succeed. That’s why you should have skilled legal counsel on your side. The knowledgeable Oakland motorcycle accident attorneys at the Law Offices of Stephen M. Fuerch have many years’ experience helping people just like you who have been injured in auto accidents. Contact us through our website or call our office at (925) 463-1073 to schedule your confidential initial consultation today.

More Blog Posts:

How a Waiver Agreement Can Cost You in Your California Auto Accident Injury Suit, Oakland Personal Injury Attorney Blog, March 31, 2016

Introducing Settlement Agreements in California Auto Accident Cases, Oakland Personal Injury Attorney Blog, Sept. 30, 2015