In a prior post, I discussed the disagreement among appellate courts concerning the effect of multiple settlement offers under Code of Civil Procedure Section 998. Yesterday, in Martinez v. Brownco Construction Co., Inc., the California Supreme Court resolved the dispute by holding that a later 998 offer does not extinguish an earlier one.
Its reasoning was:
1. Section 998 does not prohibit multiple offers;
2. multiple offers foster settlement (the goal of Section 998);
3. parties should not be penalized or rewarded for making or rejecting multiple offers;
4. encouraging more 998 offers promotes the public policy of compensating injured parties; and
5. trial courts have discretion to deny the benefits of Section 998 if there is any gamesmanship with the offers.
Accordingly, plaintiffs and defendants may now make multiple 998 offers without fear that a second one will extinguish the ability to recover interest, expert witness fees, or both, from the date of the first 998 offer. To borrow the words of Justice Marvin Baxter, who authored the Martinez decision, “the chances of settlement increase with multiple offers.” Martinez is welcomed news in these most-difficult economic times for courts and litigants. As Jim Carey said, “settle, settle, settle.”