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Recovery of Attorneys’ Fees after Statutory 998 Settlement Offer
David Tate, Esq. (San Francisco)
http://californiaestatetrust.wordpress.com
Re: Recovery of Attorneys’ Fees after Statutory 998 Settlement Offer
Martinez v. Los Angeles County Metropolitan Transportation Authority (California Court of Appeal, Second Appellate District, B221234, May 23, 2011)
I don’t see statutory Cal. Code Civ. Proc. §998 settlement offers very often in trust, estate and probate court proceedings, but they are very common in civil litigation and should be considered more often in trust, estate and probate court proceedings. A 998 offer is a binding limited offer to settle the case on the terms provided in the offer. If the offer is not accepted within the time allowed, the offer can operate to shift the recovery or payment of costs, including attorneys’ fees. I have copied and pasted below the primary relevant wording from section 998 regarding the shifting of costs.
Care needs to be exercised in wording the section 998 offer, considering all aspects of settlement if the offer is accepted, and cost shifting in terms of likely trial results if the offer is not accepted. In Martinez v. Los Angeles County Metropolitan Transportation Authority (“MTA”) a monetary 998 offer was made by Defendant MTA which in relevant part stated that each side was to “bear their own costs.” Plaintiff accepted the offer settling the case. Claiming it was the prevailing party based on the settlement terms, Plaintiff then filed a motion for recovery of attorneys’ fees under the federal and California disabilities statutes. The Appellate Court affirmed the trial court’s ruling that where a §998 offer is silent as to both costs and attorney fees, the prevailing party was entitled to both, but as in this case, where the offer specifically excludes costs but does not mention attorney fees, unless the offer expressly states otherwise, an offer of a monetary compromise under §998 that excludes “costs” also excludes attorney fees.
The primary relevant wording from Cal. Code Civ. Proc. §998 relating to the shifting of costs:
(c)(1) If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer. In addition, in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to cover costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant.
(d) If an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment or award in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the defendant to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the plaintiff, in addition to plaintiff’s costs.
Nonprofit Board Standard of Care, Risk Management and Audit Committee Responsibilities
Nonprofit Board Standard of Care, Risk Management and Audit Committee Responsibilities paper updated May 19, 2011,
Discussion: evaluating dysthymic disorders in litigation
You might be interested, the following is a link to a discussion by Dr. Leckart about the evaluation of dysthymic disorders in litigation.
http://socal.medlegalfirst.com/newsletter/270-wetc-vol1-no28
Fremont Bank Estate Attorneys E-Newsletter–Good/Useful Information
The following is a link to the Fremont Bank Wealth Management Estate Attorneys E-Newsletter for May 2011. A tremendous amount of useful information about new developments and cases. Fremont Bank Estate Attorneys E-Newsletter May 2011
Diaz/Bukey–arbitration clause not enforceable against non-settlor beneficiary
Diaz v. Bukey (California Court of Appeal, Second District, 5/10/2011, B225548)
Arbitration clause provision in a trust not enforceable against a non-settlor beneficiary who objects to the clause.
Daniel and Marie Diaz established the Diaz Family Trust. On November 1, 2004, appellant Marie L. Bukey was appointed successor trustee of the Trust. Bukey and respondent Paulette D. Diaz are sisters and beneficiaries of the Trust. The Trust became irrevocable upon the death of the surviving settlor, Marie Diaz, on November 6, 2006.
On May 8, 2009, Diaz’s attorney made a written request that Bukey provide an accounting of the financial activities of the Trust during her tenure as trustee. The accounting Bukey provided was not satisfactory to Diaz. On November 5, 2009, Diaz filed a petition for order removing trustee, appointing successor trustee, and compelling trustee to account and reimburse Trust pursuant to Probate Code section 17200. The petition alleged that Bukey breached her fiduciary duties by failing to provide a proper accounting, failing to distribute the assets of the Trust, and using Trust assets for her personal benefit.
In response, Bukey filed a demurrer and a petition for order compelling arbitration and stay of proceedings. The petition asserted that an arbitration provision contained in the Trust required that Diaz’s claims be settled by binding arbitration.
The arbitration provision states: “Any dispute arising in connection with this Trust, including disputes between Trustee and any beneficiary or among Co-Trustees, shall be settled by the negotiation, mediation and arbitration provisions of that certain LawForms Integrity Agreement (Uniform Agreement Establishing Procedures for Settling Disputes) entered into by the parties prior to, concurrently with or subsequent to the execution of this Trust. In the event that the parties have not entered into a LawForms Integrity Agreement (Uniform Agreement Establishing Procedures for Settling Disputes), then disputes in connection with this Trust shall be settled by arbitration in accordance with the rules of the American Arbitration Association. Any decision rendered either in accordance with the LawForms Integrity Agreement (Uniform Agreement Establishing Procedures for Settling Disputes) or the rules of the American Arbitration Association shall be binding upon the parties as if the decision had been rendered by a court having proper jurisdiction.”
Diaz opposed the demurrer and petition to arbitrate. The trial court issued its order overruling the demurrer and denying the petition to compel arbitration. Bukey appealed.
On appeal, the Court affirmed that although Diaz was a beneficiary of the trust, Bukey could not enforce the trust’s arbitration clause against Diaz because Diaz objected to arbitration and Diaz was not a signatory to the arbitration clause.
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David Tate, Esq., San Francisco, http://davidtate.us.
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