California, United States of America
The following excerpt is from Mesa Forest Products, Inc. v. St. Paul Mercury Ins. Co., 73 Cal.App.4th 324, 86 Cal.Rptr.2d 398 (Cal. App. 1999):
"Thus, suppose defendant's files contain 'dynamite' information likely to insulate it from liability.... Unless defendant communicates its exclusive knowledge to plaintiff with its offer, the offer is not reasonable and does not qualify as a valid section 998 offer. Since defendant knew or reasonably should have known plaintiff lacked information necessary to evaluate the offer, defendant did not make the offer in good faith for purposes of section 998. [p] However, we emphasize the reasonableness of defendant's offer does not depend on information actually known to plaintiff but rather on information that was known or reasonably should have been known." (Elrod v. Oregon Cummins Diesel, Inc., supra, 195 Cal.App.3d at p. 699, 241 Cal.Rptr. 108, italics in original, citation and fn. omitted.) 9
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