Daily Blast October 7, 2013

Today, the California Court of Appeal, Fourth Appellate District, Division Three (Orange County) issued an opinion in Rouland v. Pacific Specialty Insurance Company (Oct. 7, 2013, G047919) ___ Cal.App.4th ___, analyzing whether defendant’s settlement offers satisfied Code of Civil Procedure section 998’s requirement that the offers include a provision allowing the plaintiffs to accept the offers “by signing a statement that the offer[s are] accepted.” (Slip opn., p. 5 quoting Code Civ. Proc., § 998, subd. (b).) The court held that the defendant’s offers satisfied section 998’s acceptance provision requirement by directing the plaintiffs to file an “Offer and Notice of Acceptance” with the trial court if they accepted the proposals. (Slip opn., p. 9.)

Defendant’s offers stated, “[if] you accept this offer, please file an Offer and Notice of Acceptance in the above-entitled action prior to trial or within thirty (30) days after the offer is made.” (Slip opn., p. 7.) The plaintiffs contended this statement failed to satisfy section 998’s acceptance provision requirement for two reasons: (1) it had no line for them to accept the offers by signing them “as included in Judicial Council form CIV 090”; and (2) it “had no language . . . which stated that [the plaintiffs] shall accept the [offers] by signing a statement that the offer[s are] accepted.” (Id. at pp. 7-8.)

The court concluded that defendant’s offers satisfied the 998 acceptance requirement because they informed the plaintiffs how to accept the offers (file an “‘Offer and Notice of Acceptance’” with the trial court) and the identified means of acceptance satisfied the statute’s requirements for a valid acceptance (a writing signed by the plaintiffs’ counsel). According to the court, “[the] statute merely requires the section 998 offer to identify a manner of acceptance that complies with the statute’s additional requirement of a signed acceptance by the party or its counsel.” (Slip opn., p. 2.) Although the offers did not expressly require a written acceptance signed by the plaintiffs’ counsel, that requirement was implicit in the identified means of acceptance because any acceptance the plaintiffs sought to file with the court necessarily would have to be in writing and signed by their counsel. (Id. at p. 9.) Further, the court noted that although the California Judicial Council has approved a form entitled “Offer to Compromise and Acceptance Under Code of Civil Procedure Section 998,” it is not a mandatory form. (Id. at p. 8.) As a practice pointer, the Judicial Council Form should be used to avoid any uncertainty as to the acceptance requirement.

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