Background

In Trujillo v. City of L.A., B314042, (Cal. App. 2d Dist. October 27, 2022), the plaintiff tripped on a sidewalk and was injured. She sued the City of Los Angeles (“City”) for negligence. The City moved for summary judgment. A few days prior to the summary judgment hearing, the City sent the plaintiff a 998 offer to settle for $30,000. The hearing went ahead on March 2, 2021 and the trial court granted the City’s motion for summary judgment. The hearing ended at 3:18 p.m. Four minutes later, at 3:22 p.m., the plaintiff’s counsel sent the City an email purporting to accept the City’s 998 offer. Seven minutes after that, at 3:29 p.m., the plaintiff filed the executed 998 offer with the court.

The next day, March 3, 2021, the City objected to the plaintiff’s attempt to accept its 998 offer after the trial court had ruled on its summary judgment motion.

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Disposition

The Court held that the plaintiff's purported acceptance of the 998 offer to settle was not valid.

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The purpose of 998 offers

The California Second District Court of Appeal explained that section 998 is a statutory mechanism meant to encourage both the making and the acceptance of reasonable settlement offers prior to trial. Per the statute, section 998 offers expire 30 days after they are made. The statute provides that, if the offer is accepted within this time window, and prior to trial or arbitration, the trial court must enter judgment consistent with the offer (at 5).

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Section 998 offers expire when an oral summary judgment ruling is issued

The Court explained that a 998 offer expires at the commencement of trial. However, in the case of a summary judgment hearing, a 998 offer survives the commencement of the hearing because summary judgment hearings do not entail as large a commitment of resources. However, once an oral summary judgment ruling is issued, any open 998 offers expire (at 9).

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The plaintiff could not validly accept an expired 998 offer after a summary judgment ruling was issued

The Court of Appeal held that the trial court properly concluded that the City’s 998 offer expired by the time plaintiff purported to accept it.  Because the plaintiff did not communicate her acceptance of the City’s 998 offer until after the trial court orally granted summary judgment to the City, the acceptance was not effective as there was no longer any operative 998 offer to accept (at 11).