Parker v. Hunter

Filed 7/27/06 Parker v. Hunter CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a judgment of the Superior Court of San Diego County, Hon. Kevin A. Enright, Judge. Affirmed.

In this action for nuisance, defendant Lauren Hunter served on plaintiff Robert Parker a settlement offer under Code of Civil Procedure^[1] section 998 in the amount of $21,101. Thereafter, at a time when Parker had not accepted the first settlement offer, Hunter served a second section 998 settlement offer in the amount of $10,701. After he received the second offer, Parker attempted to accept the first. Parker also communicated to Hunter that should the court rule that his acceptance of the first offer was invalid, he would accept the second offer.

The court held a hearing to determine which offer Parker had validly accepted. After hearing argument from the parties, the court ruled that Hunter's service of the second section 998 offer, before Parker had accepted the first one, extinguished the first offer. The court also found that Parker had accepted the second section 998 offer.

Parker contends that the trial court erred in entering judgment on the second offer because his "acceptance" of the first offer was valid, and therefore he and Hunter reached a valid settlement agreement based on that offer. In support of this contention, Parker asserts that (1) a section 998 offer must remain open for 30 days; (2) Hunter never revoked her first offer; (3) a subsequent section 998 offer extinguishes a prior section 998 offer not for the purpose of settlement, but for the collection of costs; (4) he properly accepted Hunter's first section 998 offer by filing his acceptance with the court, thereby entering into a valid settlement agreement based on that offer; (5) he had insufficient time to review Hunter's July 5 brief in support of enforcing Parker's acceptance of Hunter's second section 998 offer; and (6) the courts in California have engaged in a conspiratorial "Whispering Game."

Because the material facts are undisputed, the main issue presented is a question of law: whether Hunter's second section 998 offer extinguished her original section 998 offer. We conclude her second offer extinguished her first offer, and thus the court did not err by entering judgment in favor of Parker based on his acceptance of the second offer. Accordingly, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The trial in this matter was set for July 6, 2005.^[2] On May 20, Hunter served Parker with her original settlement offer under section 998 in the amount of $21,101. On June 9, before Parker accepted Hunter's offer, Hunter served him with a second section 998 offer in the amount of $10,701.

On June 16, Parker telephoned Hunter's attorney, Alan Brubaker (who is also Hunter's counsel on appeal), and attempted to accept Hunter's original settlement offer. Brubaker objected and told Parker that the first offer had been extinguished by the second offer as a matter of law. Also on June 16, Parker submitted to the court his declaration indicating he had filed his acceptance of Hunter's first offer.

The following day, June 17, Parker faxed to Brubaker a letter stating he had accepted Hunter's first offer in the amount of $21,101 "by following the instructions in the offer itself by signing, dating, and filing the acceptance" with the court.^[3] In his faxed letter, Parker also accepted Hunter's second offer, stating, "I accept your client's June 9, 2005 [section] 998 offer in the amount of $10,701.00, in the unlikely event that the Court does not enforce the acceptance of the May 20, 2005 offer."

On June 28, about two weeks after he accepted the second offer and about one week before the July 6 trial, Parker faxed another letter to Brubaker purporting to withdraw his "conditional acceptance" of the second offer, stating: "I believe that my conditional acceptance of your client's June 9, 2005 [section] 998 offer was improper."^[4] In this letter, Parker also indicated he was not interested in a settlement, stating, "I don't know where we stand on [the court's] enforcement of my acceptance of your client's May 20 [section] 998 offer."

On July 5, the day before trial, Hunter filed a memorandum of points and authorities, supported by a declaration by Brubaker, arguing (among other things) that Hunter's second section 998 offer "effectively revoked" her first section 998 offer, and her second offer should be enforced. That same day, Brubaker attempted to serve the papers on Parker by email to the email address that Parker had previously provided.

At the hearing on Hunter's request for enforcement of her second statutory offer, held on July 6 (the day of trial), the court heard oral arguments by Parker and Brubaker on the matter. Parker, who represented himself, complained that he had not seen Hunter's brief. The court stated that Parker should read the papers that Hunter filed, instructed Brubaker to give Parker a copy of those papers, and asked Parker how much time he needed. Parker replied he needed "about [10 minutes]." The court indicated it would receive Parker's oral argument after he finished reading the papers. Later, Parker presented his argument to the court, but stated, "I feel a bit ambushed here. I haven't gotten through all [of the papers]."

After hearing arguments by both sides and reviewing the relevant case law and the facts in light of general contract principles and the statutory purpose of section 998 of encouraging settlements, the court found that Parker had validly accepted Hunter's second section 998 offer. The court thereafter entered judgment in favor of Parker pursuant to the terms of that offer.

STANDARD OF REVIEW

"[The] application of [section] 998 to an undisputed set of facts is a question of law subject to independent (de novo) review on appeal." (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2005) ¶ 8:104.13a, p. 8-57 (rev. #1 2005), italics omitted, citing Barella v. Exchange Bank (2000) 84 Cal.App.4th 793, 797; see also Crocker National Bank v. City and County of San Francisco (1989) 49 Cal.3d 881, 888 ["[i]f . . . the inquiry requires a critical consideration, in a factual context, of legal principles and their underlying values, the question is predominantly legal and its determination is reviewed independently"].) Here, because our review requires application of section 998 to an undisputed set of facts, our review is de novo under the foregoing authorities.

DISCUSSION

The issue we must decide on the undisputed facts of this case is whether Hunter's second section 998 offer extinguished her original section 998 settlement offer, and thus whether the court properly found that Parker validly accepted the second offer. Parker contends his "acceptance" of the first offer was valid, and therefore he and Hunter reached a valid settlement agreement based on that offer. In support of this contention, Parker asserts that (1) under section 998, subdivision (b)(2) (hereafter section 998(b)(2)), a section 998 offer must remain open for 30 days; (2) Hunter never "revoked" her first offer; (3) "[a] subsequent [section] 998 offer does not extinguish a prior [section] 998 offer for the purpose of settlement," and Wilson v. Wal- Mart Stores, Inc. (1999) 72 Cal.App.4th 382 (Wilson) "establishes only that a subsequent [section] 998 offer revokes a previous [section] 998 offer for the purpose of collection of costs" (italics added); (4) under section 998, subdivision (b)(1), he properly accepted Hunter's first section 998 offer by filing his acceptance with the court, thereby entering into a valid settlement agreement based on that offer; (5) he had insufficient time to review Hunter's July 5 brief in support of enforcing Parker's acceptance of Hunter's second section 998 offer; and (6) the courts in California have engaged in a conspiratorial "Whispering Game." We reject these contentions.

It is well-established that a subsequent section 998 offer communicated to the offeree prior to the offeree's valid acceptance of a previous section 998 offer from the same offeror, extinguishes the prior offer. (Palmer v. Schindler Elevator Corp. (2003) 108 Cal.App.4th 154, 158 (Palmer) [stating "we adopt the bright-line rule [that a] later offer under section 998 extinguishes any earlier offers, regardless of the validity of the offers," because that rule "best serves the statutory purpose of encouraging settlement of lawsuits prior to trial (T.M. Cobb Co. v. Superior Court[ (1984)] 36 Cal.3d [273,] 280 [(T.M. Cobb Co.)])"]; Wilson, supra, 72 Cal.App.4th at pp. 389-391 [holding that plaintiff's second section 998 offer superseded and extinguished plaintiff's first section 998 offer, and reasoning that although the plain language of section 998 is silent as to the effect of a subsequent statutory offer on a prior statutory offer, application of a "bright line" rule that a subsequent offer extinguishes a prior offer is supported by general contract law principles and "better serves" the legislative purpose of section 998, which is the encouragement of pretrial settlements]; Distefano v. Hall (1968) 263 Cal.App.2d 380, 385 (Distefano) [holding under former section 997, a predecessor to section 998, that under the "general rules" on offers, "any new offer communicated prior to a valid acceptance of a previous offer, extinguishes and replaces the prior one"]; see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2006) ¶ 12:627.1, p. 12(II)-32 (rev. #1 2005) ["An earlier [section] 998 offer is extinguished by a later statutory offer," and thus, "if the offeror discovers new facts or simply changes its mind, it may terminate its earlier offer simply by making a new offer"].)

Here, applying the foregoing legal principle, we conclude that Hunter's second section 998 offer, which she made before Parker accepted her first section 998 offer, extinguished her first offer by operation of law. The undisputed facts show that Hunter served Parker in May with her original settlement offer in the amount of $21,101, and on June 9, before he accepted the first offer, she served him with her second offer in the amount of $10,701. Parker waited until June 16--after Hunter served him with her second offer--to attempt to accept her first offer. Because Parker did not accept the first offer until after Hunter made the second offer, the second offer extinguished the first offer as a matter of law. (Palmer, supra, 108 Cal.App.4th at p. 158; Wilson, supra, 72 Cal.App.4th at p. 385; Distefano, supra, 263 Cal.App.2d at p. 385.)

Parker's assertion that under section 998(b)(2), a section 998 offer must remain open for 30 days is unavailing. That statute provides: "If the offer is not accepted prior to trial or arbitration or within 30 days after it is made, whichever occurs first, it shall be deemed withdrawn . . . ." (Italics added.) Like the petitioner in T.M. Cobb Co., supra, 36 Cal.3d at page 277, Parker maintains, albeit implicitly, that the language in section 998(b)(2) signifies that an offer is irrevocable for 30 days. The California Supreme Court in T.M. Cobb Co. rejected that interpretation, and explained that section 998(b)(2) provides "for termination by operation of law: an offer 'shall be deemed withdrawn' if it 'is not accepted . . . within 30 days after it is made . . . .' " (T.M. Cobb Co., supra, 36 Cal.3d at p. 277.) The high court further explained that "[t]his language addresses only the effect that a lapse of a prescribed period of time--30 days--will have on an offer made pursuant to the statute. Upon expiration of the 30-day period, the offer is considered withdrawn, and it may no longer be accepted." (Id. at pp. 277-278.) Noting that nothing in the quoted language of the statute resolved the issue of whether a section 998 offer is revocable, the Supreme Court held that "the policy of encouraging settlements is best promoted by making section 998 offers revocable." (T.M. Cobb Co., at pp. 278, 281, fn. omitted.)

Parker's contention that Hunter never revoked her first offer is also unavailing. Although Hunter did not expressly revoke her first section 998 offer, she was not required to do so. By making the second offer before Parker accepted the first one, the first offer was extinguished by operation of law. (Palmer, supra, 108 Cal.App.4th at p. 158; Wilson, supra, 72 Cal.App.4th at p. 385; Distefano, supra, 263 Cal.App.2d at p. 385.)

We also reject Parker's claim that Wilson, supra, 72 Cal.App.4th 382, "establishes only that a subsequent [section] 998 offer revokes a previous [section] 998 offer for the purpose of collection of costs." This interpretation of Wilson is refuted by the Wilson court's express holding that the trial court "properly concluded" that "[the plaintiff's] second statutory offer extinguished the first." (Wilson, at p. 391.)

We reject Parker's contention that under section 998, subdivision (b)(1),^[5] he properly accepted Hunter's first section 998 offer "by filing his acceptance with the court." (Italics omitted.) Because an acceptance of a 998 offer, to be valid, must be communicated to the offeror in a timely fashion, "[f]iling the acceptance with the court is not a sufficient communication to the offeror," and thus does not constitute a valid acceptance. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, ¶ 12:631, p. 12(II)-33 (rev. #1 2006), citing Drouin v. Fleetwood Enterprises (1985) 163 Cal.App.3d 486, 491-492.)

Parker's claim that he had insufficient time to review Hunter's July 5 brief in support of enforcing Parker's acceptance of the second section 998 offer, is unavailing because Parker has failed to demonstrate that he suffered prejudice. The record shows that during the July 6 hearing, the court stated that Parker should read the papers that Hunter filed, directed Brubaker to give Parker a copy of those papers, and asked Parker how much time he needed. Parker asked for "about [10 minutes]." After allowing Parker to read the papers, the court heard Parker's arguments. Although Parker complained that he felt "a bit ambushed," he acknowledged that he had consulted with an attorney, who "pointed" him to the T.M. Cobb Co., Wilson and other cases (discussed, ante), and he (Parker) had read them. Parker cannot show that he would have obtained a more favorable ruling had he been properly served with Hunter's papers, because even on appeal he has not, and cannot, persuasively argue that he validly accepted the first statutory offer.

Last, we need not reach Parker's claim that in the Palmer, Wilson, T.M. Cobb Co., and Distefano decisions (discussed, ante), the courts in California have engaged in a conspiratorial "Whispering Game."^[6] Witkin states that "[o]bvious considerations of fairness in argument demand that the appellant present all of his points in the opening brief. To withhold a point until the closing brief would deprive the respondent of his opportunity to answer it or require the effort and delay of an additional brief by permission. Hence, the rule is that points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before. [Citations.]" (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 616, pp. 647-648.) Here, Parker raises his "Whispering Game" claim for the first time in his reply brief, and he has not shown good reason for failing to present it in his opening brief.

For the foregoing reasons, we hold that Hunter's second section 998 offer extinguished her first offer. Accordingly, we affirm the judgment entered in favor of Parker based on his valid acceptance of the second offer.

DISPOSITION

The judgment is affirmed.

NARES, Acting P. J.

WE CONCUR:

McINTYRE, J.

O'ROURKE, J.

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^[1] All further statutory references are to the Code of Civil Procedure.

^[2] All further dates are to calendar year 2005 unless otherwise specified.

^[3] On April 12, 2006, this court granted Hunter's unopposed motion to augment the record, and ordered that Parker's faxed June 17 letter was deemed a part of the record on appeal.

^[4] This court's order granting Hunter's motion to augment the record (see fn. 3, ante) also ordered that Parker's faxed June 28 letter was deemed a part of the record on appeal.

^[5] Section 998, subdivision (b)(1) provides: "If the offer is accepted, the offer with proof of acceptance shall be filed and the clerk or the judge shall enter judgment accordingly . . . ."

^[6] In support of this claim, Parker cites the Wikipedia Web site and a 1984 film titled Johnny Dangerously.