Wednesday, March 27, 2013

McDaniel v. Asuncion (Cal. Ct. App. - March 27, 2013)

The California Supreme Court should grant review in this case.  Despite the fact that the Court of Appeal got it right.

The usual rule is that an unapportioned CCP 998 settlement offer isn't valid if it's made to multiple parties and conditioned on all of them accepting.  That's because every party needs to have the independent right to either accept or reject the offer, and also because we need to be able to decide whether any particular party obtained a better result at trial, which is difficult (or impossible) with "lump sum" offers to multiple parties.

The question is whether that rule applies to wrongful death cases, which are somewhat unique.  In these types of cases, the heirs (or their personal representative) are required to jointly bring a single action on behalf of the decedent, and then are awarded a single lump sum that the trial court then allocates amongst the heirs depending upon their respective damage.  Can a defendant make a valid lump sum 998 offer to the entire group of plaintiffs in these types of cases, and can plaintiffs similarly make a joint lump sum offer?  Or do these offers have to be allocated?

The Courts of Appeal have been split on this issue for a while.  Justice Levy decides that these offers do not have to be allocated since it's a joint recovery and there's a unity of interest, and hence that the 998 offer in this case validly shifted $41,000 in expert witness costs.  This holding conflicts with a 1991 decision of the Court of Appeal in a case called Gilman, but is consisted with a different case (Stallman) decided that same year as well as a subsequent decision (Johnson).

In my view, it's more than about time for the California Supreme Court to definitively resolve this two-decade old split.  Wrongful death actions are fairly common.  So are 998 offers.  Whether a party gets to recover its costs and whether it is required to allocate recovery in its offer (with the resulting downsides) involve questions too common and important to depend entirely on what particular panel one happens to draw in the Court of Appeal.

The California Supreme Court should take this one up.