Pettway v. Ross

Filed 9/5/08 Pettway v. Ross CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

Dwayne Pettway (Pettway) appeals from a judgment to the extent it awarded respondent expert witness fees and costs under Code of Civil Procedure section 998.^[1] In particular, Pettway contends the court erred in finding that respondents section 998 offer was made in good faith. We find no merit to his arguments, but we will remand for the trial court to consider whether there was a mathematical error in the calculation of the amount of the judgment. The judgment will be affirmed in all other respects.

I.                    FACTS AND PROCEDURAL HISTORY

Pettway sued respondent Janet Ross (Ross) and her husband for damages in connection with a motor vehicle accident in April 2005. According to Ross, she made a northbound turn out of a parking lot, saw a large truck blocking her way, slowly reversed her vehicle into the parking lot, and struck Pettways vehicle. The accident resulted in no damage to Rosss vehicle and only minor damage to Pettways vehicle, and neither party called the police to the scene.

Pettway claimed to have sustained soft tissue injuries and depression. Throughout the litigation, Ross contended there was no causal connection between Pettways claimed injuries and the low-impact accident.

The parties were ordered to nonbinding judicial arbitration. Defense experts did not testify at the arbitration. In November 2006, the arbitrator awarded Pettway $7,575.10 and costs of suit. Ross requested a trial de novo.

On January 12, 2007, Ross served on Pettway an offer to compromise under section 998, in the amount of $1,501. As Rosss counsel continued to urge that there was no evidence of causation, Pettway allowed the statutory acceptance period to expire.

Trial commenced between Pettway and Ross on April 23, 2007. (Rosss husband was dismissed before trial.) Rosss expert witnesses opined as to the impact Pettway experienced and the fact that Pettway required little if any treatment. On cross-examination, Ross elicited from Pettways psychotherapist that none of Pettways nine psychotherapy sessions contained any discussion of the accident and, although Pettway was on disability, it arose not from the accident but from depression he suffered due to problems with his family and his workplace.

On April 25, 2007, the jury found that Ross was negligent, but awarded Pettway just $257 ($150 for past economic loss and $107 for past noneconomic loss).

On May 23, 2007, Ross filed a memorandum of costs for $21,844.57, including $16,552.85 for fees of experts who testified at trial.

Pettway filed a motion to strike or tax costs, arguing primarily that Rosss section 998 offer was a mere token offer, unreasonable and not in good faith. At the hearing, the court taxed Rosss costs in the amount of $723.10. The court also found that Rosss section 998 offer was in good faith, explaining as follows: [T]he jury did not believe, as the court previously referenced, that [Pettway]s depression was caused by the accident. And its reflected in their award of $257. So it does, therefore, seem that [Ross]s offer pursuant to 998 in a sum of $1,500 substantially in excess of the verdict was in good faith. . . . The court thus awarded Ross her costs, including expert witness fees, less the amount taxed.

In light of the $257 awarded by the jury to Pettway, and the amounts awarded as costs to Ross, judgment was entered in Rosss favor for $21,187.40.^[2]

II.                 DISCUSSION

Under section 998, until 10 days before trial any party may serve an offer in

writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time. ( 998, subd. (b).)

If the offer is not accepted within 30 days or before trial, it is deemed withdrawn. ( 998, subd. (b)(2).) The failure to accept an offer has consequences for a plaintiff who does not obtain a more favorable result at trial. In that event, the plaintiff cannot recover its post-offer costs, must pay the defendants costs from the time of the offer, and may be held liable (as was the case here) for a reasonable sum to cover the defendants expert witness fees. ( 998, subd. (c)(1).)^[3] Where, as here, the costs awarded to the defendant exceed the amount received by the plaintiff from the jury, judgment is entered in the defendants favor for the net amount. ( 998, subd. (e).)

For a defendant to obtain the benefits of section 998, the defendants offer must have been in good faith and realistically reasonable under the circumstances of the case. (Westamerica Bank v. MBG Industries, Inc. (2007) 158 Cal.App.4th 109, 129-130 (Westamerica Bank); Arno v. Helinet Corp. (2005) 130 Cal.App.4th 1019, 1024 (Arno).) The reasonableness of a section 998 offer depends on the information available to the parties as of the date the offer was served. (Westamerica Bank, at p. 130; Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699 [Whether a section 998 offer is reasonable must be determined by looking at circumstances when the offer was made] (Elrod).)

In reviewing a finding that a section 998 offer was in good faith, we apply an abuse of discretion standard. (Arno, supra, 130 Cal.App.4th at p. 1025.) Thus, we will not substitute our opinion for that of the trial court unless the appellant demonstrates that the trial court clearly abused its discretion, resulting in a miscarriage of justice. (Thompson v. Miller (2003) 112 Cal.App.4th 327, 339 (Thompson).)

In the matter before us, Ross made a section 998 offer of $1,501 to Pettway, which Pettway chose not to accept. At trial, Pettway obtained an award of just $257. The court exercised its discretion under section 998, subdivision (c)(1), to require Pettway to pay a reasonable sum to cover costs of the services of expert witnesses actually incurred and reasonably necessary for trial. Those costs were deducted from the damages awarded to Pettway, and because the costs exceeded Pettways recovery, the net amount should be awarded to Ross. ( 998, subd. (e).)

In challenging the trial courts determination that Rosss offer was made in good faith, Pettway claims the trial court erroneously applied a retrospective standard, by concluding that the offer was in good faith because the jury did not believe Pettways evidence, rather than making the determination of good faith as of the time the offer was made.

We disagree. The courts comments reflect the view that the jurys $257 verdict was prima facie evidence of the reasonableness of the $1,501 offer. A jury verdict, by which the offeror obtains a judgment more favorable than the section 998 offer, provides a prima facie showing that the offer was reasonable, and the burden lies with the party who rejected the offer to show that the offer was not reasonable. (Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1264; Elrod, supra, 195 Cal.App.3d at p. 700.)^[4]

The court did not err in concluding that Pettway failed to show the offer was unreasonable or not in good faith. A section 998 offer is deemed to have been in good faith if it was reasonable under the circumstances when it was made and carried some reasonable prospect of acceptance. (Arno, supra, 130 Cal.App.4th at pp. 1024-1025.) The issue comes down to whether (1) the offer reflected the defendants reasonable prediction, in light of the information known to the defendant, of what the plaintiff may be awarded at trial, discounted for the fact that the plaintiff would receive the money without trial; and (2) the plaintiff knew or should have known the information known to the defendant. (Elrod, supra, 195 Cal.App.3d at pp. 695-698.)^[5]

Here, in light of the evidence suggesting the collision was minor and there was no causal link between the accident and Pettways claimed injuries, it certainly was conceivable a jury would conclude that Ross did not cause the emotional injuries Pettway alleged. Given this evidence, and discounting for the fact that Pettway would have received the $1,501 without the time, expense, and risk of trial, the offer was not unreasonable from Rosss perspective, given the information she had. Furthermore, Pettway did not establish that the information on which Ross based her evaluation of the case was unavailable to Pettway. Discovery had been completed, Rosss counsel continued to argue that Pettway was not going to establish causation, and there is no indication Pettway was unaware of the testimony his own psychotherapist would give.

Pettway nonetheless argues that Rosss offer carried no reasonable prospect of acceptance, and Ross was thus gaming the system, because of the arbitrators earlier award. (Westamerica Bank, supra, 158 Cal.App.4th at p. 129; see Wear v. Calderon (1981) 121 Cal.App.3d 818, 821-822 [$1 offer not in good faith because it was made for sole purpose of later recovering large expert witness fees].) When the offer was made, Pettway urges, he knew only that the arbitrator believed his depression was caused by the accident and awarded him $7,575.10 and costs of suit. Pettway protests that [h]e could not know the jury would not believe what the arbitrator believed.

Pettways argument is unpersuasive. When the section 998 offer was made, Pettway knew the arbitrator had apparently ruled that his depression was caused by the accident. But Pettway also knew the causation issue was still contested and there was certainly a possibility that a jury, upon trial de novo and with the benefit of Rosss expert witness testimony, would reach a different conclusion. Thus, the point is not that Pettway could not know the jury would not believe what the arbitrator believed, but that he knew there was a possibility the jury would not believe what the arbitrator believed. Moreover, given the evidence in the record on appeal, the possibility of the jury siding with Ross was quite substantial; if this possibility became reality, Pettway was certainly going to recover only a fraction of the $7,575.10 the arbitrator had awarded.

Implicit in Pettways arguments is that, having just received an arbitration award of over $7,500, he was not about to accept an offer for just $1,501, and it is therefore unfair to shift more than $21,000 in costs to him now. In evaluating the offer, however, Pettway was aware of the costs of going to trial, the possibility of an adverse jury finding as to damages, and the operation of section 998. Under these circumstances, Pettway has failed to establish that the trial court clearly abused its discretion in concluding the section 998 offer was made in good faith. (Thompson, supra, 112 Cal.App.4th at p. 339.)

In our review of the record, however, we detect what may be an error in the calculation of the judgment. The trial judge stated he was taxing amounts of $608.90, $66, $36.95 and $11.25. These amounts total $723.10. In light of Rosss request for $21,844.57 in costs, and a taxed amount of $723.10, the costs awarded to Ross totaled $21,121.47. That total, less the $257 awarded by the jury to Pettway, should have resulted in a judgment in Rosss favor for the net amount of $20,864.47, not $21,847.40.

Because of the state of the record on appeal and the parties briefs, we decline to modify the judgment without providing the parties and the trial court the opportunity to reevaluate the calculation of the judgment. We will therefore remand the matter for the limited purpose of calculating the correct amount of costs that were awarded to Ross and the amount of the judgment in Rosss favor.

III.               DISPOSITION

The matter is remanded to allow the trial court to recalculate the amount of costs awarded to Ross and to decide whether, based only on that recalculation, the amount of the judgment in Rosss favor should be modified. In all other respects, the judgment is affirmed.

NEEDHAM, J.

We concur.

JONES, P. J.

REARDON, J.*

        Judge of the Superior Court of Alameda County, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

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^[1] Unless otherwise indicated, all statutory references are to the Code of Civil Procedure.

^[2] In his opening brief, Pettway states that the court taxed Rosss costs in the amount of $657.10. This does not comport with the transcript of the hearing, in which the judge stated he was taxing amounts of $608.90, $66, $36.95 and $11.25, which total $723.10. Moreover, under either calculation the amount of the judgment appears incorrect, as we discuss post.

^[3] Section 998, subdivision (c)(1) reads: If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendants costs from the time of the offer. In addition, in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to cover 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 defendant.

^[4] Even if the courts articulated reason for its ruling was not correct, we would uphold the ruling because it is supported by a proper legal theory. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980-981.)

^[5] The court stated in Elrod: As a general rule, the reasonableness of a defendants offer is measured, first, by determining whether the offer represents a reasonable prediction of the amount of money, if any, defendant would have to pay plaintiff following a trial, discounted by an appropriate factor for receipt of money by plaintiff before trial, all premised upon information that was known, or reasonably should have been known to the defendant. It goes without saying that a defendant is not expected to predict the exact amount of his exposure. If an experienced attorney or judge, standing in defendants shoes, would place the prediction within a range of reasonably possible results, the prediction is reasonable. [Citation.] [] If the offer is found reasonable by the first test, it must then satisfy a second test: whether defendants information was known or reasonably should have been known to plaintiff. (Elrod, supra, 195 Cal.App.3d at p. 699, italics in original, footnote omitted.)