A Plaintiff Suing in Several Different Legal Capacities is One Party Can Properly Be Served with One CCP 998 Settlement Offer

A Single Person Suing in Three Different Non-representative Capacities is a Single Plaintiff for the Purpose of a 998 Offer

Gloria Peterson v. John Crane, Inc. (Aug. 23, 2007, A115079, First Appellate District, Division Five)
30 page opinion (20 page majority, 10 page dissent)

When one person sues in three different legal capacities is there one plaintiff or three? The Court of Appeal held that there is only one plaintiff, at least for the purposes of a Code of Civil Procedure section 998 settlement offer.

Husband and wife John and Gloria Peterson sued John Crane, Inc. alleging that John's asbestosis and lung cancer were asbestos-related. From the beginning the suit include Gloria's claim for loss of consortium. During the pre-trial portion of the case, John died. The court granted Gloria's motion to be appointed as the successor-in-interest to John's claims and granted her leave to file a second amended complaint. In that second amended complaint Gloria stated her individual claim for loss of consortium, a survivor claim as John's successor-in-interest, and a wrongful death claim as John's legal heir.

Defendant John Crane, Inc. served a CCP 998 offer to settle for a mutual waiver of costs, including all expert fees. The offer was directed to Gloria Peterson, individually, and as successor-in-interest to John Peterson, decedent and Gloria Peterson as legal heir of John Peterson, deceased. Gloria let the offer expire. At trial John Crane, Inc. obtained a defense verdict. The company then filed a memorandum of costs and Gloria brought a motion to tax costs. The trial court found that the CCP 998 offer was valid and awarded John Crane approximately $72,000 in costs, including nearly $50,000 in expert witness fees. The court did not ask about the relative financial resources of the parties or Gloria's ability to pay. Gloria did not request that the court ask about those financial matters.

On appeal, Gloria argued that the 998 offer was invalid because it was a single offer addressed to multiple plaintiffs, and that the court did not consider the parties' relative economic interests in determining whether the award was reasonable.

In general, a section 998 offer made to multiple parties is valid only if it is expressly apportioned among them and not conditioned on acceptance by all of them. There is an exception to that rule which applies if the multiple plaintiffs have a unity of interest such that there is a single, indivisible injury.

Neither the rule nor the exception matter unless a 998 offer was made to multiple parties. In addressing this preliminary question, the Court decided that it had not been. Looking to the plain and commonsense meaning of the word "party" and the definition found in the Oxford English Dictionary, the Court came to the conclusion that a "party" is a person -"not a cause of action, primary right, or legal capacity, but a person." Gloria was an individual who had acquired the legal capacity to pursue particular legal theories but she pursued them all as a single party. (None of her claims were representative claims that she was pursuing on the behalf of others). Therefore the 998 offer had been valid As a result, John Crane was entitled to an award of post-offer costs.

Gloria further argued that expert witness fees awarded to John Crane had not been "reasonable" (as required by the statute) because the trial court had not considered Gloria's financial resources when determining the reasonableness of the award. The Court rejected this argument because it had not been raised in the trial court. Gloria argued that the case upon which she relied had not been decided until after the entry of judgment in the trial court and that the Court had the discretion to consider her argument because it was an issue of pure law. The Court declined to exercise that discretion.
Justice Needham wrote the opinion. Justice Gemello concurred.

Presiding Justice Jones dissented. He would have found that the 998 offer was made to two parties because Gloria was asserting two legal claims. The offer was improperly conditioned on the acceptance of both parties. The unity of interest exception did not apply. As a result the 998 offer was invalid and did not provide a foundation for an award of post-offer costs.