Statutory Offer Not Made in Good Faith When Made Shortly After Defendant Appeared

    01.03.2019

     Licudine v. Cedars-Sinai Medical Center, 2 DCA 2, California
    Court of Appeal, No. B286350, Jan. 3, 2019

    The California Court of Appeal has held that a CCP § 998 offer was not made in good
    faith when made five days after a defendant filed its answer, defendant
    had very little information available, and plaintiff never responded to that
    concern.

    Dionne Licudine underwent surgery performed by Dr. Ankur Gupta under the supervision of Dr. Brenden Carroll at Cedars-Sinai Medical Center (collectively, Cedars). Dr. Gupta nicked a vein inside the abdominal cavity and caused substantial internal bleeding. Licudine filed a medical malpractice lawsuit against Cedars. Licudine then made Cedars an offer to compromise pursuant to Code of Civil Procedure Section 998 for $249,999.99, plus legal costs.  Cedars responded, however, that Licudine made the Section 998 offer only five days after Cedars had filed its answer and it was “too soon for it to make any determination as to whether [Licudine’s 998 offer] was reasonable.” The trial court yielded a total verdict of $5,594,557 in favor of Licudine, and she sought $2,335,929.20 in prejudgment interest from the date of her Section 998 offer to the date of judgment. The court struck Licudine’s request for prejudgment interest.

    Affirmed. A plaintiff who sues and prevails at trial is statutorily entitled to prejudgment interest starting from the date she makes a settlement offer under Section 998 as long as that offer is “valid,” and the subsequent verdict is “more favorable” than the rejected Section 998 offer. A Section 998 offer is valid if made in good faith, and only if, among other things, the offeror knew that the offeree had reasonable access to the facts necessary to “intelligently evaluate the offer.”

    Three factors are especially pertinent: (1) how far into the litigation the Section 998 offer was made; (2) the information available to the offeree prior to the Section 988 offer’s expiration; and (3) whether the offeree let the offeror know that it lacked sufficient information to evaluate the offer and, how the offeror responded. Here, first, Licudine made her Section 998 offer just 19 days after serving Cedars with her complaint and just five days after Cedars filed its answer. Second, Cedars had very little information available to it prior to the date Licudine’s Section 998 offer expired. Third, Cedars alerted Licudine to its concern that it was “too soon for it to make any determination as to whether” her Section 998 offer was reasonable, and Licudine never responded. Therefore, the Section 988 offer was not made in good faith and was held invalid. 

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