Juan Gonzales v. Wayne Bill Lew

Code of Civil Procedure section 9981 is a cost-shifting

statute designed to encourage parties to settle their lawsuits

prior to trial by punishing a party that refuses a reasonable

settlement offer. In order to trigger section 998, a settlement offer

must be clear, in that it must allow the party receiving the offer

to evaluate whether the party making the offer is likely to obtain

a more favorable verdict at trial.

In this wrongful death case, two people (Virginia Gonzalez

and Maverick Crowder) died after a fire engulfed the rented

home in which they were living. Both sets of the decedents’ heirs

(plaintiffs) sued the owners of the rented home, Wayne and

Maria Lew, and plaintiffs subsequently made a joint offer to

settle both claims for $1.5 million. The Lews rejected the offer

and plaintiffs prevailed at trial; the jury awarded Virginia’s heirs

more than $2.2 million and Maverick’s heirs just over $357,000.

The Lews appeal the court’s order awarding costs to plaintiffs

under section 998, arguing the joint offer to settle both wrongful

death claims was invalid because it did not allow them to

evaluate each claim independently. Under the unique

circumstances of this case, we conclude the joint offer was valid

and affirm the court’s order.

FACTS AND PROCEDURAL BACKGROUND

Two people died in a residential home fire: Virginia

Gonzalez (age 49) and Maverick Crowder (age 3). Virgina and her



1 All undesignated statutory references are to the Code of Civil

Procedure.

3

husband, Juan,2 rented the home from the Lews. The precise

cause of the fire was never determined.

At the time of the fire, Virginia lived in the home with Juan

and the couple’s minor daughter Jasmine. Virginia and Juan had

three other children: Yvette, Richard, and Priscilla. Maverick

(Juan’s son, born to Kathleen Crowder) also lived in the home

with the Gonzalez family. Apparently, “[a]lthough Maverick …

was treated as a member of [the] Gonzalez family by Juan and

Virginia and their children, the children learned after the fire

what Virginia and Juan had decided (in the best interest of the

family) not to tell them previously: that Maverick … was in fact

the child of Juan Gonzalez and Kathleen Crowder.”

Virginia’s heirs (Juan and the four children) and

Maverick’s heirs (Juan and Kathleen Crowder) sued the Lews3

alleging the wrongful death of their respective decedents. The

plaintiffs later served the Lews with a written offer to settle both

wrongful death claims in the amount of $1.5 million. The Lews

did not accept the offer but later made their own offer, addressed

to all plaintiffs jointly, to settle both wrongful death claims in the

amount of $1 million. Plaintiffs did not accept the offer.

The matter proceeded to trial before a jury. With respect to

Virgina, the jury’s verdict awarded $2,254,300 to Juan, Priscilla,

Richard, Yvette, and Jasmine. The jury also awarded Juan and

Kathleen Crowder $357,100 for the death of Maverick. The jury



2 Because all the members of the Gonzalez family have the same

last name, we use their first names when we refer to them

individually.

3 Plaintiffs also sued the Lews in their capacity as trustees of the

Lew Family Trust. For convenience, we refer to all of the defendants

collectively as the Lews.

4

attributed 15 percent of the fault to Juan, leaving the Lews

responsible for the remaining 85 percent. In subsequent

proceedings, the court allocated the damages among the

decedents’ heirs. The court also reduced Juan’s economic

damages by 15 percent under Proposition 51.

Following trial, plaintiffs jointly submitted a memorandum

of costs seeking, among other things, expert witness fees

($76,931.50) and interest on the judgment beginning the date the

settlement offer expired ($347,595.14), both as a consequence of

the Lews’ failure to accept their section 998 settlement offer. The

Lews filed a motion to tax plaintiffs’ costs, arguing the settlement

offer was not a valid offer under section 998 because the offer

concerned two independent wrongful death claims.

As to that issue, the court denied the Lews’ motion.4 After

examining the text of section 998, the court concluded the statute

“does not require the separation of claims or plaintiffs. Neither

does it invalidate joint offers.” Citing the overall goal of section

998—encouraging settlement—the court further stated that

“joint offers should be encouraged rather than discouraged. …

Where the parties are in fact attempting to settle on a joint basis,

their efforts should not be impeded by judge made rules requiring

the separation of parties or claims.” The court then found

plaintiffs’ settlement offer was valid under section 998. The Lews

timely appeal.



4 The motion to tax plaintiffs’ costs contained several independent

arguments. The court granted the motion in part and denied the

motion in part.

5

DISCUSSION

The Lews assert the court erred in awarding plaintiffs

expert witness fees and post-settlement-offer interest on the

judgment. According to the Lews, plaintiffs’ global settlement

offer was invalid under section 998 because it offered to settle

both wrongful death actions and did not allocate the settlement

between the two sets of decedents’ heirs. On the facts of this case,

we conclude the court did not err.

1. Standard of Review

The application of section 998 to undisputed facts is a legal

issue we review de novo. (See Martinez v. Brownco Construction

Co. (2013) 56 Cal.4th 1014, 1018 (Martinez).)

2. The overriding purpose of section 998 is to encourage

pretrial settlement of litigation.

Generally, a prevailing party in a civil case “is entitled as a

matter of right to recover costs.” (§ 1032, subd. (b).) Recoverable

costs do not typically include the fees of expert witnesses not

ordered by the court. (§§ 1032, 1033.5, subd. (b)(1).) But expert

witness fees are recoverable in some circumstances, as when a

more favorable judgment for the plaintiff follows a defendant’s

rejection of a valid pretrial section 998 settlement offer. (See

Martinez, supra, 56 Cal.4th at pp. 1019 & 1022, fn. 4; Kahn v.

The Dewey Group (2015) 240 Cal.App.4th 227, 237 (Kahn).)

Section 998 establishes a procedure for shifting costs upon a

party’s refusal to settle by “expand[ing] the number and type of

recoverable costs and fees over and above those permitted by

section 1032(b).” (Murillo v. Fleetwood Enterprises, Inc. (1998) 17

Cal.4th 985, 1000.) In addition to expert witness fees, a

6

prevailing plaintiff in a personal injury case may obtain post-offer

interest on the judgment. (Civ. Code, § 3291.)

As relevant here, section 998 provides: “(a) The costs

allowed under Sections 1031 and 1032 shall be withheld or

augmented as provided in this section. [¶] .... [¶] (d) If an offer

made by a plaintiff is not accepted and the defendant fails to

obtain a more favorable judgment or award in any action or

proceeding ..., the court or arbitrator, in its discretion, may

require the defendant to pay a reasonable sum to cover postoffer

costs of the services of expert witnesses, who are not regular

employees of any party, actually incurred and reasonably

necessary in either, or both, preparation for trial or arbitration,

or during trial or arbitration, of the case by the plaintiff, in

addition to plaintiff’s costs.” “To qualify for these augmented

costs, the plaintiff’s offer must be in writing and conform to

statutory content requirements. (§ 998, subd. (b).)” (Martinez,

supra, 56 Cal.4th at p. 1019.)

Section 998 is intended to encourage the settlement of

lawsuits prior to trial by penalizing a party who fails to accept a

reasonable settlement offer. (T.M. Cobb Co. v. Superior Court

(1984) 36 Cal.3d 273, 280.) “To effectuate this policy, section 998

provides ‘a strong financial disincentive to a party—whether it be

a plaintiff or a defendant—who fails to achieve a better result

than that party could have achieved by accepting his or her

opponent’s settlement offer.’ [Citation.] At the same time, the

potential for statutory recovery of expert witness fees and other

costs provides parties ‘a financial incentive to make reasonable

settlement offers.’ [Citation.] Section 998 aims to avoid the time

delays and economic waste associated with trials and to reduce

7

the number of meritless lawsuits. [Citations.]” (Martinez, supra,

56 Cal.4th at p. 1019.)

3. Joint settlement offers are not always valid under

section 998.

On its face, section 998 applies to offers made by “a

plaintiff” or “a defendant.” Nonetheless, our courts have applied

section 998 where an offer is jointly made by or offered to more

than one party. But where a settlement offer involves multiple

parties on one side, it will not always trigger section 998.

3.1. Unallocated joint settlement offers made to

multiple parties.

California courts uniformly recognize as invalid an

unallocated offer from a defendant to multiple plaintiffs with

separate claims where the offer is conditioned on acceptance by

all.

In Meissner v. Paulson (1989) 212 Cal.App.3d 785

(Meissner), for example, the plaintiffs (a landlord and his insurer)

sued the defendant5 (a tenant) after a fire occurred on the leased

premises. The landlord sought to recover unpaid rent, attorney’s

fees, and the cost of repairing the premises under both a breach

of contract and a tort theory. (Id. at p. 791.) The insurer asserted

a subrogation claim for the cost to repair the leased premises.

(Ibid.) The defendant offered to settle the entire case in the

amount of $25,001 but plaintiffs rejected the offer. Before trial,

the parties stipulated the defendant owed the landlord $5,855.87

in unpaid rent; a jury later found the defendant was not



5 The tenant’s insurer joined the action during the litigation, after

the tenant died.

8

negligent and the insurer recovered nothing. (Id. at p. 789.) In

light of the defendant’s settlement offer, the trial court awarded

the defendant additional costs under section 998. (Id. at p. 790.)

The Court of Appeal reversed the cost award. The court

briefly discussed two prior cases which held an unallocated offer

to multiple plaintiffs invalid under section 998 because it was

impossible to tell, after trial, whether any of the plaintiffs

received a better result after the trial. (Meissner, supra, 212

Cal.App.3d at p. 790.) In one case, Randles v. Lowry (1970) 4

Cal.App.3d 68 (Randles), a defendant made a joint offer to settle

a tort action with three plaintiffs, two of whom eventually

recovered at trial and sought to recover costs under section 998.

(Meissner, at p. 790.) But because the settlement offer was not

allocated among the three plaintiffs, it was impossible to tell

whether the two prevailing plaintiffs obtained more favorable

results at trial. (Ibid.) That court held the settlement offer invalid

under section 998 because it recognized that, as a practical

matter, a party receiving a joint unallocated offer may not be able

to prove, as section 998 requires, that he or she obtained a more

favorable result at trial—and therefore should not be subject to

its cost-shifting provision.

But in Meissner, the court did not rest its decision on that

point. There, the defendant had no difficulty establishing that

the landlord’s insurer, having received nothing at trial, plainly

would have fared better under the settlement offer, even after

subtracting the landlord’s recovery of unpaid rent. Instead, the

court focused on the fact that the defendant’s offer, to be

accepted, required both plaintiffs to consent to settlement and

determine between themselves the apportionment of the

settlement. (Meissner, supra, 212 Cal.App.3d at pp. 790–791.)

9

The court noted, as a matter of policy, that applying section 998

to the unallocated joint offer in the case before it “would

introduce great uncertainty into this area of the law. Plaintiffs

would be required to second-guess all joint offers to determine

whether a failure to reach agreement with coplaintiffs would

cause a risk of section 998 costs against them. We believe the

Legislature did not intend to place this burden on offerees. To

enforce the purpose of section 998, we find as a matter of law only

an offer made to a single plaintiff, without need for allocation or

acceptance by other plaintiffs, qualifies as a valid offer under

section 998.” (Ibid.)

Courts have applied the same reasoning where a plaintiff

makes an unallocated settlement offer to multiple defendants

with potentially varying liability. In Taing v. Johnson

Scaffolding Co. (1992) 9 Cal.App.4th 579 (Taing), for instance,

the plaintiff was injured when he fell from a scaffold while

working for a subcontractor at a construction site. (Id. at p. 582.)

The plaintiff later sued the general contractor, the scaffolding

company, and the owner of the site (collectively, the defendants)

and then offered to settle the case against all three defendants for

$249,999. The defendants did not accept the offer. A jury later

found the scaffolding contractor negligent and 100 percent

responsible for the plaintiff’s injuries and awarded the plaintiff

$492,626. The court awarded the plaintiff his expert witness fees

under section 998 and prejudgment interest under Civil Code

section 3291.

The Court of Appeal reversed the cost and interest award.

On appeal, the scaffolding contractor argued “the joint offer

unfairly burdened [the] defendants by requiring them each to

second-guess whether failure to reach an agreement to settle

10

with the other defendants would risk imposition of section 998

penalties.” (Taing, supra, 9 Cal.App.4th at p. 583.) The court

agreed, noting with reference to Meissner that “an unapportioned

offer by a single plaintiff to multiple defendants … requires any

defendant who wants to accept to obtain the concurrence of his or

her codefendants. This places a reasonable defendant at the

mercy of codefendants whose refusal to settle may be

unreasonable.” (Ibid.) The court therefore held the plaintiff’s offer

invalid under section 998 because it was not “sufficiently specific

to permit the individual defendant to evaluate it and make a

reasoned decision whether to accept without the additional

burden of obtaining the acceptance of codefendants … .” (Id. at p.

585.)

As the cases just discussed illustrate, settlement offers

made to multiple parties present special challenges where section

998 is concerned. Nevertheless, our courts have noted some

situations in which an unallocated offer made to multiple parties

is valid under section 998.

For example, where several plaintiffs receiving a

settlement offer have a unity of interest in the subject of the

litigation, an unallocated joint settlement offer to them may be

valid under section 998. At least one court has held that spouses

who suffer an injury to community property have a unity of

interest, i.e., a single, indivisible injury. (See, e.g., Vick v.

DaCorsi (2003) 110 Cal.App.4th 206, 210–211.) Thus, where a

husband and wife brought an action for fraud and breach of

contract in connection with the purchase of a family home, an

unallocated settlement offer to them was held to be valid. (Ibid.)

In that instance, the rationales for not applying section 998—the

inability of one party to settle without the consent of the other

11

parties, and the potential difficulty of ascertaining whether the

party seeking costs obtains a more favorable verdict—are not

present. Where community property interests are concerned, for

example, either spouse may act unilaterally on behalf of the

community to accept or reject a settlement offer and whatever

cost-shifting effect section 998 might have, it will affect the

community as a whole. The community also suffers a single

injury and obtains a single damages award, making it possible to

determine with certainty whether a more favorable verdict

results.

Additionally, several courts have held that in a wrongful

death case, a decedent’s heirs have a unity of interest such that a

settlement offer made jointly to all the heirs is valid under

section 998.6 In McDaniel v. Asuncion (2013) 214 Cal.App.4th

1201 (McDaniel), the court observed that a wrongful death cause

of action is atypical, in that a decedent’s heirs may only bring a

single, indivisible action for wrongful death. All heirs must join

together in a single action and the jury will award a single lump

sum for all recoverable damages. (Id. at p. 1206.) The recovery of

the individual heirs is determined later by the court based upon

the proportion each heir’s personal damage bears to the damage

suffered by the others. (Ibid.) In light of these facts, the Court of



6 The courts of appeal are currently divided on this question. (See,

e.g., Gilman v.Beverly California Corp. (1991) 231 Cal.App.3d 121,

124–126 (Gilman) [rejecting joint offer theory because “each heir

should be regarded as having a personal and separate cause of action;”

lump sum award is merely a procedural element in wrongful death

cases].) But the issue in this case is not whether an unallocated offer to

a decedent’s heirs is valid. Rather, we consider whether an unallocated

global settlement offer from multiple plaintiffs (who, in this case, are

heirs of two decedents) is valid under section 998.

12

Appeal determined that an unallocated joint settlement offer to a

decedent’s heirs is valid under section 998. (Id. at p. 1208.) The

court noted that since the jury renders a single lump sum verdict,

it is simple to compare the joint offer to the verdict in order to

determine whether a more favorable result was obtained at trial.

(Id. at pp. 1207–1208.)

3.2. Unallocated joint settlement offers made by

multiple parties.

To some extent, our courts have applied the rationale of the

cases just discussed to circumstances in which an unallocated

joint settlement offer is made by multiple parties. The Lews rely

on two such cases, Gilman and Hurlbut v. Sonora Community

Hospital (1989) 207 Cal.App.3d 388 (Hurlbut). But as we explain,

that approach does not always make sense and, perhaps for that

reason, our courts have not taken a uniform approach to cases in

this area. (See McDaniel, supra, 214 Cal.App.4th at p. 1207

[recognizing divergent approaches].)

The Lews first cite to Hurlbut, a personal injury case

arising out of injuries sustained by an infant during birth. There,

the child and both parents sued the hospital where the birth took

place. The parents sought emotional distress damages and the

child sought damages relating to her physical injuries. (Hurlbut,

supra, 207 Cal.App.3d at p. 393.) Prior to trial, the three

plaintiffs made a joint, unallocated settlement offer to the

hospital proposing two alternatives: a cash payment of $499,000

plus monthly payments in the amount of $17,000 for the life of

the child, increasing at a rate of 4 percent per year, or a single

lump sum payment in the amount of $1,900,000. (Id. at p. 407.)

The jury awarded damages as follows: $11,500 per month plus

$250,000 noneconomic damages to the child, $250,000

13

noneconomic damages to each of the parents, $350,000 to the

mother representing lost earning capacity, and $14,603

reimbursement for care already provided to the child. (Id. at p.

393.) The trial court granted plaintiffs’ request for expert witness

fees based on the settlement offer. (Id. at p. 394.)

The Court of Appeal reversed the award, noting that

section 998 makes no mention of structured settlements and

plaintiffs introduced no evidence concerning the present value of

either their proposed settlement or the jury’s award. (Hurlbut,

supra, 207 Cal.App.3d at pp. 408–409, 411.) Plaintiffs therefore

failed to establish, as section 998 requires, they obtained a more

favorable verdict: “Having failed to present evidence sufficient to

establish the present value of the structured settlement offer,

plaintiffs may not take advantage of the benefits offered under …

section 998.” (Id. at p. 409.) The court concluded, “[a]bsent such

findings, it is impossible to determine whether plaintiffs achieved

a more favorable judgment at trial, making the … section 998

offer unenforceable.” (Id. at pp. 408–409.)

Hurlbut offers little guidance to us here, as we are not

concerned with a structured settlement nor any other problem of

valuation concerning the plaintiffs’ offer or the subsequent

judgment. But the Lews rely on additional analysis by the court

which is, arguably, dicta. After concluding the plaintiffs failed to

establish the value of either their settlement offer or the jury’s

verdict, and therefore failed to establish they obtained a more

favorable judgment, the court went on to state that the joint

nature of the settlement offer “precludes a determination of

whether each plaintiff received a judgment more favorable than

the offer.” (Hurlbut, supra, 207 Cal.App.3d at p. 409, original

emphasis.) The court briefly discussed Randles, which, as already

14

noted, involved an unallocated offer from a defendant to three

plaintiffs with severable causes of action. (Ibid.) At trial, the

plaintiffs received damage awards totaling less than the

settlement offer. Nevertheless, the court denied the defendant’s

request for costs because the unallocated offer made it impossible

to determine whether any individual plaintiff received a less

favorable result than he would have under the settlement offer.

(Ibid.)

After noting Randles involved an offer to multiple

plaintiffs, the court in Hurlbut stated the same principle should

apply to an offer from multiple plaintiffs. (Hurlbut, supra, 207

Cal.App.3d at p. 409.) It therefore concluded the settlement offer

in the case before it was invalid: “To consider plaintiffs’ joint

settlement offer as valid would deprive defendant of the

opportunity to evaluate the likelihood of each party receiving a

more favorable verdict at trial. Such an offer makes it impossible

to make such a determination after verdict.” (Id. at p. 410.)

Although Hurlbut is not controlling,7 as the Lews assert,

we pause to comment on its reasoning. It is not at all apparent,

as Hurlbut suggests, that the principle stated in Randles and

Meissner should apply with equal force in the converse

circumstance. In Randles and Meissner, the defendant chose to

lump the plaintiffs together and in so doing, not only melded

their separate claims together, but also required all of them to

agree to the proposed settlement terms. As the court noted in

Meissner, if that sort of offer were valid under section 998, a



7 There is no horizontal stare decisis in the California Court of

Appeal. (See, e.g., Jessen v. Mentor Corp. (2008) 158 Cal.App.4th 1480,

1489, fn. 10.)

15

plaintiff could be liable for additional costs under section 998

through no fault of her own, as in the case where an offer is made

to multiple plaintiffs and one plaintiff wants to settle but others

do not. (Meissner, supra, 212 Cal.App.3d at p. 791.) No similar

concern is present in the converse situation—where plaintiffs

with separate claims choose to band together for the purpose of

offering a global settlement to a single defendant. In that

instance, the plaintiffs have presumably negotiated the allocation

of any settlement to their satisfaction and they are in control of

their exposure to liability under section 998. And the individual

party receiving the offer does not have to obtain the consent of

other parties—or risk exposure to additional costs under section

998. As a practical matter, it may not be possible for any of the

plaintiffs to establish they obtained a more favorable verdict—as

in the case where each plaintiff later receives an amount less

than the settlement offer—but that will not always be the case

and would not, in any event, justify a rule that joint offers from

multiple parties are always invalid.

In the other case relied upon by the Lews, Gilman, the

Court of Appeal followed Hurlbut. There, multiple heirs sued a

skilled nursing facility following the decedent’s death. (Gilman,

supra, 231 Cal.App.3d at p. 123.) Collectively, the plaintiffs

offered to settle the case for $250,000, then made a second offer to

settle for $150,000. (Id. at p. 124.) The total judgment for

plaintiffs was $228,379.79—more favorable than their second

settlement offer. (Id. at p. 124 & fn. 4.) After taking the view that

the heirs had individual, rather than indivisible, claims, the court

referenced the rationale of Hurlbut: “the joint offer to compromise

did not afford [the defendant] the opportunity to evaluate the

separate and distinct loss suffered by each plaintiff as a result of

16

the death” of the decedent. (Id. at p. 126.) But ultimately the

court concluded that, as a practical matter, “[w]ithout an

apportionment of the damages among the four plaintiffs, it is

impossible to say that any one of them received a judgment more

favorable than she would have received under the [settlement]

offer.” (Ibid.)

Drawing on these cases, the Lews argue here that the

plaintiffs’ joint settlement offer was “void ab initio.” But the idea

that an offer jointly made is invalid from its inception, simply

because it is jointly made, has been repeatedly rejected.

In Stallman v. Bell (1991) 235 Cal.App.3d 740 (Stallman),

for example, plaintiffs’ decedent died in a car accident. The

decedent’s widow sued the defendants for wrongful death and the

decedent’s estate sought damages for personal injury and

property damage. (Id. at p. 743.) The defendants rejected a joint

settlement offer from the widow and the estate in the amount of

$225,000. (Ibid.) After obtaining a less favorable judgment at

trial, defendants challenged the plaintiffs’ request for costs based

upon their section 998 settlement offer, arguing the “statutory

offer was void from its inception because it was made jointly by

both the [widow] and decedent’s estate.” (Id. at p. 745.) The court

observed that although Hurlbut held a similar joint offer invalid,

“[m]ore recent cases have declined to mechanically apply a rule

that renders void any joint offers without first examining

whether it can be determined that the party claiming costs has in

fact obtained a more favorable judgment.” (Id. at p. 746.) The

court concluded that in the case before it, it was possible to

determine with certainty that plaintiffs obtained a more

favorable judgment (even though the amount of the offer and the

amount of the judgment were very close) because the jury

17

rendered a single verdict for both plaintiffs. (Id. at p. 747.) Thus,

the court could compare the joint unallocated offer to the single

unallocated verdict and determine which side obtained the more

favorable judgment.

The court applied similar reasoning in Fortman v. Hemco,

Inc. (1989) 211 Cal.App.3d 241 (Fortman). There, a toddler

suffered severe injuries after she fell out of a moving car. (Id. at

p. 248.) The toddler filed a personal injury claim against the

manufacturer of a custom part installed on the car; her mother,

the driver of the car, sought emotional distress damages. The two

plaintiffs offered to settle their claims for $1 million and the

defendant rejected the offer. (Id. at pp. 246–247, 249.) The

mother later dismissed her claim and the case proceeded to trial

only on the toddler’s claim. (Id. at p. 262.) The jury awarded the

toddler more than $23 million in damages. (Id. at p. 250.)

Challenging the award of prejudgment interest to the

toddler, which was based on the section 998 settlement offer, the

defendant argued the plaintiffs’ offer was invalid because it was

jointly made. (Fortman, supra, 211 Cal.App.3d at p. 263.) Citing

cases holding that an unallocated offer to multiple plaintiffs is

invalid under section 998, the defendant argued, as was argued

in Hurlbut, that because the joint offer from the two plaintiffs

was unallocated, it was impossible to determine whether a more

favorable verdict was obtained at trial. (Ibid.)

The court rejected that argument, however, noting that a

mechanical application of a rule against joint settlement offers

lacked common sense. Specifically, the court concluded “it is

absolutely clear that [the toddler] received a greater amount in

damages after trial than she would have received had [the

defendant] accepted the joint offer even if the entire amount of

18

the offer, $1 million, is attributed to her. … [The toddler’s] $23

million-plus award leaves no doubt in anyone’s mind that her

recovery far exceeded the statutory offer.” (Id. at p. 263; see also

Deocampo v. Ahn (2002) 101 Cal.App.4th 758, 776 [where

husband sued for injury and wife sued for loss of consortium,

joint settlement offer for $1 million valid where jury awarded

husband $11 million; verdict exceeded offer to such an extent it

was absolutely clear husband obtained more favorable

judgment].)

In another case, Johnson v. Pratt & Whitney Canada, Inc.

(1994) 28 Cal.App.4th 613 (Johnson), the appellate court took a

similar approach. Plaintiffs’ decedent, a Marine Corps pilot, died

in a helicopter crash. The surviving spouse and children of the

decedent sued the manufacturer of the helicopter engine

contending it used defective fuel nozzles in the engine. (Id. at p.

615.) The manufacturer rejected plaintiffs’ $1 million unallocated

joint settlement offer; the jury subsequently awarded the three

plaintiffs $2.1 million in economic damages and awarded the

decedent’s spouse $1.3 million in noneconomic damages. (Id. at p.

628.) The trial court awarded plaintiffs additional costs, including

expert witness fees, based on their section 998 offer. The

defendant argued the joint offer was invalid because (as the Lews

argue here) “it could not evaluate the joint offer with respect to

each plaintiff at the time the offer was made and it is now

impossible to tell what portion of the combined verdict the jury

assigned to each plaintiff. … [I]t cannot be determined if the

award was more favorable than the terms of the offer; and the

court should have denied plaintiffs’ motion for prejudgment

interest and expert fees.” (Ibid.)

19

Following the reasoning of Stallman, the appellate court

affirmed the cost award. The court emphasized, as a matter of

“common sense,” that plaintiffs made a joint offer of $1 million

and received verdicts of $2.1 million (for all three heirs) and

$1.3 million (for the decedent’s spouse). (Johnson, supra, 28

Cal.App.4th at p. 630.) “Compelling logic leads to the conclusion

that these plaintiffs recovered more than the amount of their

section 998 offer.” (Ibid.)

These courts rejected the rule that an unallocated joint

offer is always invalid, even though such an offer might

theoretically render it impossible to determine later whether a

party claiming costs obtained a more favorable verdict and is

therefore entitled to costs under section 998. In Fortman, for

example, the $1 million joint offer from the plaintiffs could have

made it impossible for one of the plaintiffs to prove she obtained a

more favorable verdict. Had the toddler received $800,000 at

trial, for example, it would be impossible to know whether she

fared better under the verdict or under the unallocated joint offer

of $1 million. But where the verdict in favor of one plaintiff

exceeds the offer that was jointly made, as was the case in

Fortman where two plaintiffs offered to settle for $1 million and

one plaintiff later received a $23 million verdict, that plaintiff can

establish with certainty, as section 998 requires, that she

obtained a more favorable verdict.

These decisions impliedly, though not explicitly, reject the

argument (made by the Lews here) that an unallocated joint offer

from multiple parties should always be invalid because it

precludes the receiving party from evaluating the claims of the

offering parties separately. And this notion, drawn from cases

such as Meissner where the parties receiving an unallocated joint

20

offer must all agree to settle or risk exposure to additional costs

under section 998, does not readily apply in reverse. As we have

said, if an unallocated offer from one party to multiple opposing

parties were valid, the party making the offer would effectively

force the opposing parties to work together and would, where

those parties cannot agree, subject even parties who wish to

settle to the punitive effect of section 998. As our courts have

observed, although the Legislature enacted section 998 to

encourage settlement of litigation, it did not intend the costshifting

provisions to apply to parties who wish to settle but

cannot do so through no fault of their own. But where, as here,

multiple parties choose to band together and offer a global

settlement, that concern is simply not present.

At least one court has directly criticized the sort of

argument advanced by the Lews in this case. In Persson v. Smart

Inventions, Inc. (2005) 125 Cal.App.4th 1141 (Persson), the

plaintiff and defendant Nokes were founders and shareholders of

Smart Inventions, Inc. (Id. at p. 1146.) The plaintiff sued Nokes

and Smart Inventions (collectively, the defendants) for fraud and

breach of fiduciary duty. (Ibid.) The defendants jointly offered to

settle the case for $500,000; Persson refused and later obtained a

judgment for $306,000 plus attorney’s fees. (Id. at pp. 1146,

1169.) After trial, the defendants sought an award of attorney’s

fees based on their joint settlement offer. (Id. at p. 1169.) The

trial court found the defendants’ settlement offer invalid under

section 998 because the offer was unallocated as between the

defendants. The court noted that a joint offer from defendants

may be valid under section 998 where the defendants are jointly

and severally liable. (Ibid.) But in the case before it, the

defendants’ liability was not coextensive: the court had already

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ruled, at the time of the offer, that Smart Inventions did not owe

the plaintiff any fiduciary duty. (Ibid.) On that basis, the court

denied the defendants’ fee request, stating: “Because the section

998 offer ‘was a joint and several offer for multiple defendants

and did not separate out and distinguish between them and the

separate causes of action applicable to each,’ [the plaintiff] ‘was

not in a position to evaluate the offer.’ ” (Ibid.)

In reversing the order, the appellate court rejected the trial

court’s notion that the offer needed to separate the offers as

between the defendants, observing that “[a] joint offer by two

defendants that judgment in a stated amount may be taken

against each one of them, jointly and severally, even though one

defendant has no potential liability on one of plaintiff’s claims, is

not uncertain. The offer in no way prevents the plaintiff from

assessing his chances of obtaining a better judgment against

either defendant after trial. Moreover, such an offer does not

present any difficulty in determining whether the subsequent

judgment is more favorable than the offer. Consequently, no

reason exists for its invalidation.” (Persson, supra, 125

Cal.App.4th at p. 1170.) The court pointedly dismissed the

plaintiff’s argument that the joint offer placed him in an

untenable position because it deprived him of the opportunity to

assess the chance of prevailing against each defendant in an

amount in excess of the offer: “It is incomprehensible why a

plaintiff would be unable to evaluate an offer in which each

defendant offers to have judgment taken against him, jointly and

severally, in a stated amount … . The plaintiff need only assess

the chances of recovery on each of his claims, no matter which

defendant is liable, and add them together. If the joint offer

exceeds that amount, the plaintiff should accept it.” (Ibid.)

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4. The plaintiffs’ joint settlement offer was not invalid.

Applying the rationale of Fortman and the other cases just

discussed, we conclude the court properly awarded plaintiffs costs

under section 998. Plaintiffs offered to settle both wrongful death

claims for $1.5 million and collectively recovered more than $2.6

million. And Virginia’s heirs plainly obtained a more favorable

verdict at trial, inasmuch as the jury awarded them more than

$2.2 million. Thus, the present case is similar to Fortman, where

the mother and toddler asserted separate claims for emotional

distress and personal injury, respectively, and the toddler later

obtained a verdict of $23 million—an amount far in excess of the

joint unallocated settlement offer of $1 million. Here, as there,

even if the entire amount of the settlement offer is attributed to

the wrongful death claim of Virginia’s heirs, it is plain they

obtained a more favorable result at trial.

8

Relying on Hurlbut and Gilman, the Lews argue that

plaintiffs’ joint offer to settle both wrongful death actions was

invalid “ab initio” because it “deprived [them] of the opportunity

to evaluate the likelihood that a jury would award damages to

Virginia Gonzalez’s heirs in excess of the $1.5 million 998 offer,

but award Maverick Crowder’s heirs less than the 998 offer.” As

we have said, this argument has been rejected by a number of

courts in circumstances where it is plain that one of the parties



8 It is not clear that Maverick’s heirs fared better at trial. But it is

significant that the focus of trial was on the cause of the fire that killed

both plaintiffs’ decedents, and all the plaintiffs were represented by

the same counsel below, apparently proceeding as a unit. After trial,

plaintiffs submitted a joint cost bill. The Lews have not requested any

reduction in or allocation of the cost award, only that it be reversed in

its entirety, and we therefore do not consider that issue.

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offering joint settlement later obtains a verdict that exceeds the

joint offer. Moreover, as the court pointed out in Persson, it is

“incomprehensible” that the Lews could not evaluate the risk of

refusing the settlement offer because it was not allocated

between the two sets of heirs. The Lews could have evaluated

their exposure on the wrongful death claims individually and

then added the figures together. If they fared better under

plaintiffs’ offer, it would have been prudent to accept it. Plainly,

the Lews did not anticipate that either wrongful death claim,

standing alone, would exceed the settlement offer. And this is

precisely the situation in which an additional cost award under

section 998 is appropriate and in furtherance of the goal of

encouraging parties to accept reasonable settlement offers. (See,

e.g., Hurlbut, supra, 207 Cal.App.3d at p. 408 [“ ‘As a general

rule, the reasonableness of a defendant’s offer … represents a

reasonable prediction of the amount of money, if any, defendant

would have to pay plaintiff following a trial’ ”].)

The Lews also assert “[t]here was no single, indivisible

injury to evaluate for settlement purposes.” Although we agree

plaintiffs did not suffer a single, indivisible injury because they

are the heirs of two different and unrelated decedents, we

conclude that fact does not preclude the application of section 998

here. In several of the cases discussed ante, the parties offering

settlement had different claims stemming from different types of

injuries: Stallman involved claims by both the estate and the wife

of a decedent, Fortman involved a personal injury claim by a

toddler and an emotional distress claim by the toddler’s mother,

and Deocampo involved a personal injury claim by a husband and

loss of consortium by his wife. (Stallman, supra, 235 Cal.App.3d

at p. 743; Fortman, supra, 211 Cal.App.3d at p. 249; Deocampo,

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supra, 101 Cal.App.4th at p. 766.) In each of those cases, the

courts awarded additional costs under section 998,

notwithstanding the absence of a single, indivisible injury.

In evaluating the application of section 998 in various

factual contexts, we are guided by the overarching policies in

favor of encouraging reasonable settlements, compensating

injured parties, and avoiding the injection of uncertainty into the

998 process—a result certain to encourage gamesmanship and

other actions incompatible with the goal of resolving, rather than

creating, legal disputes. (See Martinez, supra, 56 Cal.4th at pp.

1020–1021; Kahn, supra, 240 Cal.App.4th at pp. 242–244.) If

plaintiffs with disparate claims want to make a global settlement

offer which would put an end to the litigation at hand (and work

out the details among themselves), they should be encouraged to

do so.

The order denying in part and granting in part the motion to tax costs is affirmed. Respondents to recover their costs on appeal.