Filed 2/7/14 Bui v. 4901 Centennial Partners CA5




                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIFTH APPELLATE DISTRICT

HAO D. BUI,
                                                                                           F066582
         Plaintiff and Appellant,
                                                                              (Super. Ct. No. CV-271889)
                   v.

4901 CENTENNIAL PARTNERS, LLC et al.,                                                    OPINION
         Defendants and Respondents.



         APPEAL from a judgment of the Superior Court of Kern County. David R.
Lampe, Judge.
         Law Offices of Morton Minikes, Morton Minikes; Castro & Associates, Joel B.
Castro and David H. Pierce for Plaintiff and Appellant.
         Law Offices of Craig D. Braun, Craig D. Braun; Klein, DeNatale, Goldner,
Cooper, Rosenlieb & Kimball and Catherine E. Bennett for Defendants and Respondents.
                                                        -ooOoo-
       Plaintiff Hao D. Bui filed an action seeking damages for construction defects in a
building he purchased from defendants 4901 Centennial Partners, LLC et al. Following
the completion of plaintiff’s evidence before a jury, the trial court granted a motion for
nonsuit as to all causes of action. Plaintiff appealed the trial court’s order nonsuiting his
negligence cause of action only (case No. F065656). We recently affirmed the nonsuit
order in defendants’ favor. In the instant appeal, plaintiff contends the trial court erred in
awarding expert costs to defendants under Code of Civil Procedure section 998.1 We
agree and reverse the order awarding expert costs to defendants.
                                       DISCUSSION
I.     Standard of Review
       Where the issue on appeal involves the interpretation of a statute and the
application of the statute to undisputed facts, independent or de novo review applies.
(City of Saratoga v. Hinz (2004) 115 Cal.App.4th 1202, 1212.) Interpreting what
constitutes a valid offer under section 998 is subject to review for abuse of discretion.
(Whatley-Miller v. Cooper (2013) 212 Cal.App.4th 1103, 1113.)
II.    Section 998
       Section 1032 sets forth the general rule allowing recovery of costs.
Section 1033.5 identifies the costs that are recoverable. Fees paid to experts retained by
the parties are not recoverable costs. Section 998 modifies the rule of section 1032. If a
defendant makes a section 998 offer which a plaintiff refuses and thereafter fails to obtain
a more favorable judgment, the plaintiff is precluded from recovering its costs after the
offer was made and the defendant is entitled to recover its costs incurred after the offer
was made; additionally, the trial court has discretion to order a plaintiff to pay a
defendant’s expert witness costs. In relevant part, section 998, subdivision (b) provides:

1     Unless otherwise noted, all further statutory references are to the Code of Civil
Procedure.



                                              2.
               “… The written offer shall include a statement of the offer,
       containing the terms and conditions of the judgment or award, and a
       provision that allows the accepting party to indicate acceptance of the offer
       by signing a statement that the offer is accepted. Any acceptance of the
       offer, whether made on the document containing the offer or on a separate
       document of acceptance, shall be in writing and shall be signed by counsel
       for the accepting party or, if not represented by counsel, by the accepting
       party.”2
Thus, a valid section 998 offer must not only specify the terms and conditions of the
judgment or award, it must also include a provision explaining how the responding party
is to accept the offer. Failure to include such a provision renders the section 998 offer
invalid.
       Puerta is an example of such a circumstance. There, the wording of the
defendant’s section 998 offer only proposed a waiver of costs in exchange for a dismissal
and stated the offer would remain open for 30 days. The trial court awarded expert fees
under section 998. The appellate court reversed, declaring the offer invalid because
under the plain language of the statute, the offer was required to contain a provision
stating that the recipient can accept the offer “‘by signing a statement that the offer is
accepted.’” Since the offer did not contain that statement, it did not comply with the
statute and was invalid. (Puerta, supra, 195 Cal.App.4th at p. 1273.) The court rejected
the argument that the statute’s “shall” verbiage be treated as less than mandatory. The
court reasoned that applying the statute as written would not defeat its purpose, but would
serve the statutory purpose of eliminating uncertainty by removing the possibility that an
oral acceptance might be valid. (Id. at pp. 1271-1273.)
       Similarly, in Perez v. Torres (2012) 206 Cal.App.4th 418, we affirmed the trial
court’s ruling that the defendant’s section 998 offer was invalid because it failed to
include the statutorily required acceptance provision even though the plaintiff did not

2      This language was added by amendment effective January 1, 2006. (Stats. 2005,
ch. 706, § 13; Puerta v. Torres (2011) 195 Cal.App.4th 1267, 1271 (Puerta).)



                                              3.
accept the defendant’s pretrial offer to settle the case for more than the amount that the
jury ultimately awarded.
       In Rouland v. Pacific Specialty Insurance Co. (2013) 220 Cal.App.4th 280
(Rouland), the defendant’s section 998 offers included a provision that asked the
plaintiffs to file an “‘“Offer and Notice of Acceptance”’” with the trial court. (Id. at
pp. 283, 288.) The question was whether that provision satisfied section 998’s
acceptance provision requirement. The court held that it did. The statute required that
the plaintiffs be informed that they could accept the offers in a writing signed by their
counsel. While the offers did not expressly require a written acceptance signed by their
counsel, that requirement was “implicit in the offers” because any acceptance the
plaintiffs sought to file with the court necessarily would have to be in writing and signed
by their counsel pursuant to section 128.7, subdivision (a) (all documents filed with the
court must be signed by counsel). Since the offer specified that an acceptance must be
filed with the court and since section 128.7, subdivision (a) required documents filed with
the court to be signed by counsel, the section 998 offers were upheld as complying with
the requirements that it specify the manner of acceptance. (Rouland, supra, at p. 288.)
III.   Defendants’ Section 998 Offer
       Defendants’ section 998 offer was presented in a January 27, 2012 letter. The
letter included the terms of the offer (dollar amount sought, payment to be made within
30 days of execution of a written settlement agreement, the action be dismissed with
prejudice, plaintiff execute a general release, settlement was contingent upon a court
finding that it was made in good faith, there be no admission of liability, each party bear
its own costs and attorney fees, and defendants retained all their rights to pursue their
cross-complaint), stated it was made pursuant to section 998 and specified it would
remain open for a period of 30 days. The letter concluded with the following:




                                              4.
       “Should [plaintiff] not accept this offer in writing within that period of
       time, this offer shall expire and no longer be available for acceptance by
       [plaintiff].”
       The section 998 offer did not require that the acceptance be filed with the court, as
was the case in Rouland, supra, 220 Cal.App.4th 280. It also did not specify that the
written acceptance be signed.
IV.    Defendants’ Offer Did Not Comply With Section 998
       Section 998 requires that the written settlement offer include a provision that
allows “the accepting party to indicate acceptance of the offer by signing a statement that
the offer is accepted.” In other words, the offer itself must advise the offeree that
acceptance of the offer must be (1) in writing and (2) signed. A written acceptance that is
not signed does not comply with the statute’s requirements. This is further borne out by
the language of the next sentence in the statute, which states that any acceptance “shall be
in writing and shall be signed.”
       In the instant case, defendants’ section 998 offer did advise plaintiff that any
acceptance of the offer needed to be in writing. However, the section 998 offer made no
mention that the written acceptance also required a signature. The statute requires that
the offer advise the accepting party of both requirements. Since defendants’ offer did not
advise plaintiff of the signature requirement, the offer did not comply with section 998
and was rendered invalid.
V.     Conclusion
       Defendants’ section 998 offer was invalid. Therefore, the trial court erred in
awarding defendants their expert costs under section 998.




                                              5.
                                    DISPOSITION
       The lower court’s ruling awarding expert costs to defendants is reversed. Costs on
appeal are awarded to plaintiff.


                                                              _____________________
                                                                             Kane, J.
WE CONCUR:


 _____________________
Levy, Acting P.J.


 _____________________
Franson, J.




                                           6.
