Wednesday, March 23, 2005

Arias v. Katella Townhouse Homeowners Ass'n (Cal. Ct. App. - March 21, 2005)

Here's a case where Justice Fybel clearly gets it right. The essential holding is that voluntary payments made by the defendant after a Section 998 offer expires are considered part of the plaintiff's judgment. For example, you can't make a $50,000 998 offer, make a voluntary payment of $30,000 60 days later, and then obtain your post-offer costs if the plaintiff obtains $25,000 at trial. Sure, $25,000 is less than $50,000. But it's not less than $55,000 (i.e., $25,000 plus the prior $30,000 payment).

Which similarly means you can't make a $100,000 payment the day before trial in order to make sure that your prior $50,000 998 offer is going to be higher than plaintiff's eventual judgment. Of course that's the rule. It's silly to argue otherwise (as counsel for defendants, Arthur Travieso and James Nguyen of Lewis Brisbois vainly did here). Not worth the ink that was spilled, much less the legal fees attendant thereto.